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194 banks, thrifts under a severe enforcement action

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194 banks, thrifts under a severe enforcement action

So far in 2017, only 29 severe enforcement actions have been handed to a commercial bank or thrift, compared to 55 in full year 2016.

According to S&P Global Market Intelligence data, as of Nov. 27, there were 194 banks operating under a severe enforcement action, down from 215 in an August analysis.

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On Oct. 25, Dixon, Mo.-based Mid America Bank & Trust Co. received a cease and desist order from the Federal Reserve for running afoul of Federal Trade Commission Act rules in regard to the company's balance transfer credit cards and was ordered to pay $5 million in restitution. The following day, the Fed approved Perryville, Mo.-based Reliable Community Bancshares Inc.'s acquisition of Mid America's parent company, Mid America Banking Corp.

Nashville, Tenn.-based Citizens Savings Bank and Trust Co. received a cease and desist order from the FDIC on Oct. 3 requiring the bank to maintain a Tier 1 leverage ratio greater than 9%, a Tier 1 risk-based capital ratio of at least 11% and a total risk-based capital ratio of at least 13%. As of Sept. 30, Citizens reported a Tier 1 leverage ratio of 8.09%, a Tier 1 risk-based capital ratio of 8.93% and a total risk-based capital ratio of 10.19%.

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In August, Gunnison, Utah-based Gunnison Valley Bank received a cease and desist order from the FDIC requiring it to maintain an 11% leverage ratio. At Sept. 30, the bank had a leverage ratio of 11.14%.

Irvine, Calif.-based California Business Bank also received a cease and desist order from the FDIC in August, this one requiring the bank to maintain a leverage ratio of at least 10%. At Sept. 30, California Business Bank reported a leverage ratio of 15.08%.

With the lifting of Los Alamos National Bank's consent order on Nov. 3, New Mexico joins nine other states with zero banks or thrifts under a severe enforcement action.

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S&P Global Market Intelligence defines severe enforcement actions as cease and desist orders, prompt corrective action directives, and formal agreements/consent orders handed to a bank or thrift by a federal regulator. This analysis does not include severe enforcement actions issued to holding companies or credit unions.

It is important to note that certain cease-and-desist orders issued by federal regulators in the recent past may be referred to as consent agreements on regulatory websites due to a change in language. However, a cease and desist order and a consent order are derived from the same section of law 12 U.S.C. 1818(b). Both orders are structured the same, outlining areas of concern and the corrective actions that an institution must take. In order to maintain consistency with previous years, this analysis refers to these recent actions as cease and desist orders.

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Click here to view the map as a PDF.

To view a refreshable spreadsheet of all operating banks and thrifts under a severe enforcement action as of Nov. 27, 2017, click here.

For a spreadsheet listing the five most recent enforcement actions for an individual bank or thrift, click here. Click here to visit S&P Global Market Intelligence's enforcement actions page.