TAMPA — The Federal Deposit Insurance Corp. has issued a cease-and-desist order against First Commercial Bank of Tampa Bay and two other Florida banks, setting strict deadlines for the Tampa bank to turn around its troubled operations.
The actions, taken in May and disclosed by regulators Friday, could force a sale if First Commercial is unable to increase deposits and "eliminate dependency on volatile funding sources," the FDIC said.
In its order, the FDIC said it had reason to believe First Commercial "had engaged in unsafe or unsound banking practices and had committed violations of law and/or regulations." Among other charges, regulators said the bank was operating with inadequate board supervision, inadequate capital, a large volume of poor quality loans, inadequate oversight of its loan portfolio, and lax underwriting and weak lending procedures.
First Commercial agreed to the consent order without admitting or denying the allegations.
Calls to First Commercial on Friday were directed to chairman and chief executive Albert Salem Jr., who could not be reached.
A community bank with two locations catering primarily to Tampa's Westshore financial district, First Commercial is marking its 20th anniversary this year.
The bank, which has about $150 million in assets, has struggled with a heavy concentration of delinquent loans tied to real estate.
It has been viewed as susceptible to a federal takeover for months and ratings agency Bauer Financial has singled it out as among the most troubled in the bay area. Bauer earlier this year gave First Commercial a "zero-star" rating, signifying deep distress. It recently upgraded the bank to a "one-star" rating, indicating "troubled."
The FDIC said it processed 43 orders in May, including 20 cease-and-desist orders across the country.
The FDIC also issued cease-and-desist orders against Premier American Bank in Miami and the Royal Palm Bank of Florida in Naples.
Four of the actions cited Friday targeted Georgia banks.
"This just reinforces how many problems we have in Georgia and Florida," said Ken Thomas, a Miami bank consultant and economist.
Thomas estimates that out of 305 problem banks in the country, 45 of them (or 15 percent) are in Georgia and 30 (or 10 percent) are in Florida.
"That's incredible. Think about it," Thomas said. "Two states account for 25 percent of all the problem banks."
Jeff Harrington can be reached at firstname.lastname@example.org or (727) 893-8242.