Chambers Bank Discloses Cease And Desist Order
by January 27, 2012 5:11 pm 146 views
Kim Souza with our content partner, The City Wire, reports that Danville-based Chambers Bank disclosed today (Jan. 27) that it is under a cease and desist order issued by the Federal Deposit Insurance Corp. in December.
The bank joins the ranks of 10 other financial institutions in Northwest Arkansas facing heightened regulatory scrutiny in recent years.
Chambers Bank reported $462,000 in net earnings during the first nine months of 2011. The full year report is due next month.
Like many other banks across the country, Chambers continues to face major loan losses related to plummeting real estate values. The bulk of Chambers’ losses were felt in 2010 when the bank reported annual losses of $17.8 million, according to the FDIC call reports.
The bank has consented, without admitting or denying any charges of unsafe or unsound banking practices or violations of law, weaknesses in earnings and liquidity, and insufficient management and board oversight, to the issuance of the cease and desist order,” stated in the order.
The order requires Chambers Bank to re-evaluate its management team and seek federal approval before new hiring may occur. Bank officials were also told to clean up their delinquent loan portfolio and charge-off the old debt immediately. By Feb. 21, the bank will also need to submit a plan for reducing its overall non-performing loans which totaled $7 million that were 90 days past due and $16.5 million in 30-89-day delinquencies.
Board chairman John Ed Chambers III offers comment on the order as does a University of Arkansas banking expert. You can also access the order and read more at this link.