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FDIC releases list of 71 enforcement actions for December

150px-US-FDIC-Logo.svgOn Friday, the FDIC issued a list of 71 enforcement actions taken against individuals and banks in December, down slightly from 72 in November, and one notice of charges.

The actions taken include 11 consent orders, 17 removal and prohibition orders, 13 civil money penalties, one supervisory corrective action, one voluntary termination of insurance, 12 section 19 orders, one modification order, 14 orders terminating consent orders and cease and desist orders, one order terminating supervisory corrective action and one notice, according to Problem Bank List.

Though the banking and financial industries have stabilized since the financial crisis, nearly one out of every 10 institutions insured by the FDIC is still listed as a troubled institution, and nearly all problem banks have enforcement actions brought against them by regulators. Out of a total 7,181 FDIC-insured banks and savings institutions, 694 banks were listed as problem banks.

The FDIC brought civil money penalties against the New York-based Riverside Bank, the Nebraska-based Hastings State Bank, the Bank of Louisiana, the Illinois-based Casey State Bank, the Ohio-based Valley Central Savings Bank, Graham Savings and Loan in Texas, the First State Bank in Iowa, Wheeler County State Bank and Haven Trust Bank in Georgia, Pinnacle Bank in Nebraska, the California-based Sonoma Valley Bank and the Arkansas-based Decatur State Bank, Problem Bank List reports.

The FDIC also issued a prompt corrective action order, the most serious action that can be taken against a bank and usually a strong indicator that the bank is on the verge of failure, to First South Bank of Spartanburg in South Carolina. The bank has a high troubled asset ratio of 360 percent, and, historically, after a bank exceeds a troubled asset ratio of 100 percent, the institution’s failure is imminent.

The FDIC PCA directive said that First South Bank was “’significantly undercapitalized,” adding in the directive that the bank must increase its leverage ratio and total risk-based capital ratio to eight percent and 10 percent respectively within 60 days of the directive’s effective date, as well as submit a capital restoration plan, according to Problem Bank List.

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