Chambers Bank Popped by FDIC for ‘Unsound’ Practices
by January 27, 2012 1:59 pm 142 views
Chambers Bank of Danville has entered into a consent order with the Federal Deposit Insurance Corp., which charged the bank with unsound banking practices related to poor credit practices and insufficient board oversight.
The bank neither admitted nor denied any of the FDIC’s charges but agreed to the remedies outlined in the Dec. 21 order, which was made public on Friday morning.
John Chambers III, CEO of the bank’s holding company, Chambers Bancshares Inc., was not immediately available for comment.
Chambers Bank has not yet filed its call report for the fourth quarter of 2011, but the wording of the order suggests that significant write-downs may be in evidence. Well capitalized even after a loss of $17.8 million in 2010, the bank was ordered to make plans for shoring up its capital following the charge-off of assets that regulators had classified as losses.
The bank was showing a small profit of $462,000 for the first three quarters of 2011.
The order restricts the lending Chambers Bank can do for borrowers who already have problem loans and instructs the management to reduce lending concentrated in certain borrowers. The bank was given 45 days from Dec. 21 to hire a consultant approved by the FDIC to assess “management and staffing needs.”