Western Commercial Bank Enters Into Consent Order With FDIC and DFI
23 October 2009 - 11:48AM
Marketwired
WCB Holdings, Inc. (OTCBB: WCBH), located at 21550 Oxnard Street,
Suite 100, Woodland Hills, California, announced that Western
Commercial Bank, its wholly owned subsidiary, has entered into a
Consent Order to Cease and Desist with the Federal Deposit
Insurance Corporation and the California Department of Financial
Institutions effective September 18, 2009. The Order, which
provides the Bank with a roadmap to address the impact of the
challenges presented by these economic times, includes many plans
and actions that the Bank has already adopted and begun to
implement.
The Order also requires the Bank to:
1. Increase the capital by no less than $1 million and achieve a
9.5% Tier 1 Capital ratio within 90 days.
2. Reduce its dependence on non-core deposits (wholesale and
broker deposits -- broker deposits in today's market could be
low-cost certificate of deposits arranged by a third party with
terms for six months up to several years) based on a plan to be
filed with and deemed acceptable to the regulators.
3. Reduce its classified assets as identified in the most recent
Report of Examination to no more than 50% of the Tier 1 Capital
plus the Allowance for Loan and Lease Losses within 120 days.
4. Implement plans to diversify the Bank's loan portfolio,
reduce the commercial real estate loan concentration, manage and
mitigate the Bank's liquidity risk and diversify its funding
sources within 60 days.
5. Develop a 3-year Strategic Plan and budget, including goals
and strategies to improve the Bank's net interest margin, increase
interest income and improve and sustain earnings, within 60
days.
Before the Order was signed, Management and the Board had
already been working on a number of programs with much success
already achieved.
Members of the WCB Board of Directors/Founders have recently
provided over $900,000 in new capital through their investment in
WCB's preferred stock. Management and the Board feel confident that
WCB will raise additional capital to more than satisfy the
Order.
The Order and FDIC rules prevent the Bank from accepting or
renewing brokered deposits without first obtaining a waiver from
the FDIC. The Bank has applied to the FDIC for a waiver to continue
to accept certain types of brokered deposits. Still, the Board and
Management have already implemented a program to reduce the Bank's
dependence on brokered and wholesale deposits and have reduced the
level of brokered deposits by 50% since February of this year.
Further, Management has already hired a senior business development
officer or begun deposit growth programs both of which are showing
results.
The Board and Management also feel that the Bank will reduce
classified assets as required by the Order. Many of those assets
are already in a workout program with a high expectation of
success.
The Board and Management feel very strongly that the Bank's past
performance and future viability have been indications of strength
and growth in a difficult economic time. We are disappointed that
the Bank received the Order. However, the Board and Management want
to assure all of the Bank's shareholders and clients that
compliance with the Order will be fully achieved and in the
near-term future.
Carl W. Raggio, III, President and CEO, said: "The entire
banking industry is suffering from the major financial debacle that
occurred a year ago and the ensuing economic downturn. While we
have seen erosion in our loan portfolio due to the economy, we feel
very strongly that we have appropriate levels of collateral and
cash flow to support those problematic credits along with the
appropriate reserve levels as cushions for potential, but
unforeseen losses. We encourage our clients and shareholders to
visit our Bank and meet with Management to discuss our aggressive
action plans for building a better bank in these difficult times.
As part of our commitment to the success of the Bank, members of
the WCB Board and Founders have injected an additional $900,000 in
capital, and we plan on raising additional capital to far exceed
the minimum regulatory requirements. We should remind our
shareholders that we exceed the minimum capital requirements
without the Order and will continue to exceed the revised limits as
a result of this Order. Management and the Board began these
programs well before the regulators determined the need for the
issuance of the Order. Further, we will continue to provide deposit
and loan products for our clients with the same high standard of
service they have grown accustomed to. The Order does not change
anything in terms of how we will continue to do business with our
local market clients."
Mr. Raggio also added: "The Board and I share the same feelings
in regard to our current financial position. We are a strong
Management team with the experience to deal with the current
economic conditions. If not already, we will fully comply with the
Order and once it is removed, continue to build our Bank
successfully."
Forward-looking statements, by their nature, are subject to
risks and uncertainties. The statements contained in this release
that are not historical facts are forward-looking statements based
on management's current expectations and beliefs concerning future
developments and their potential effects on the Company. Readers
are cautioned not to unduly rely on forward-looking statements.
Actual results may differ from those projected. Forward-looking
statements speak only as of the date they were made. The Company
undertakes no obligation to publicly revise these forward-looking
statements to reflect subsequent events or circumstances that may
occur after the date that forward-looking statements are made.
The Bank offers a comprehensive selection of business deposit
and loan products, cash management services as well as
SBA-guaranteed loans. The Bank is not involved in any of the
sub-prime products.
The Bank provides financial services to small and mid-sized
businesses, entrepreneurs and professionals in the San Fernando
Valley and Ventura County.
Regular office hours are Monday through Friday, 9:00 a.m. until
4:00 p.m.
Information on the Bank's services is available by calling (818)
449-7700 and online at www.westerncommercialbank.com. Information
on the Bank's stock may be obtained from Carl W. Raggio, III,
President and Chief Executive Officer, at (818) 449-7700. The stock
trades on the OTC Bulletin Board.
Contact: Carl Raggio President & Chief Executive Officer
(818) 449-7711
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