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FDIC deems Civis Bank 'significantly undercapitalized'

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FDIC deems Civis Bank 'significantly undercapitalized'

The Federal Deposit Insurance Corp. issued a supervisory prompt corrective action directive against Rogersville, Tenn.-based Civis Bank, effective June 28, after determining the bank to be "significantly undercapitalized."

The FDIC on June 8 notified the Volunteer Bancorp Inc. subsidiary of its capital status, based on its call report for the quarter ended March 31, and the bank's capital condition continues to rapidly deteriorate, according to the filing.

The directive requires Civis Bank to increase its capital to a level sufficient to restore the bank to an "adequately capitalized" level or to pursue a sale to another insured depository institution. The directive also imposes restrictions on the compensation paid to senior executive officers as well as restrictions on capital distribution.