Executives with First Commercial Bank of Tampa Bay are no longer calling the shots in the front office.
FCB Financial Inc., the parent of the troubled Tampa bank, has agreed to leave many of its key money management decisions in the hands of the Federal Reserve's Atlanta branch, the Fed disclosed Tuesday.
Among other areas, First Commercial CEO Albert M. Salem Jr. consented that FCB will seek prior written approval from the Federal Reserve before it:
• declares or pays any dividends;
• takes any payment out of the bank that reduces its capital;
• distributes any interest or principal from subordinated debentures or trust preferred securities;
• purchases or redeems any shares of its stock;
• incurs, increases or guarantees any debt.
First Commercial, a 20-year-old community bank with about $150 million in assets, has been hobbled by exposure to soured real estate loans. Salem said the Fed's move is "a mirror image" to restrictions placed on the banking unit last month by the Federal Deposit Insurance Corp. The FDIC, which issued a cease-and-desist order against First Commercial, oversees the bank subsidiary while the Federal Reserve oversees the parent company.
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."
Salem said the bank's financial condition has improved this past month, as it has restructured a number of loans and taken over some large troubled properties in its loan portfolio.
Jeff Harrington can be reached at email@example.com or (727) 893-8242.