The Federal Reserve Bank of Atlanta and the Florida Office of Federal Regulation have ordered Landmark Bank of Florida to strengthen its loan practices and increase their loan capital in the next 60 days, according to a report in the Tampa Bay Business Journal.
The bank has until January 5, 2010 to deliver a written plan for improving its credit risk management systems and credit administration program. Until that time, the bank is barred from extending or renewing loans to high-risk customers and must recalculate the way it handles loan and lease losses. The bank’s collateral management system has been under scrutiny by regulators for several months after the bank reported a total risk-based capital ratio of 7.25 percent, which is considered “undercapitalized” by the FDIC.
There are several steps that Landmark Bank of Florida could take to alleviate its problems, including the implementation of new financial services software to adequately track its risk management processes along with its current assets and risks.
