The FDIC announced last week that it had taken action in April against Hometown Community Bank in Braselton in an effort to improve the bank’s financial position. In a 35 page consent order, the FDIC ordered Hometown Community Bank to take a variety of steps to strengthen the bank’s weak financials. The bank, which began in 2005, has been struggling in the recession. At the end of last year, the bank had a troubled asset ratio of 300 percent and that had been as high as 500 percent in June of last year. The bank lost $4.7 million in 2010 and $576,000 in 2011. At the end of December, Hometown Community Bank had troubled assets of $28.4 million and total assets of $136 million.
Among a number of actions the bank was ordered to take were:
FDIC orders Hometown Community Bank to improve position
• Stronger participation and more training of its board of directors.
• A stronger management team.
• Tier 1 Capital of at least eight percent and Total Risk-Based Capital of at least 12 percent.
• Raise more capital through the additional sale of stock, board contributions, or other actions and a contingency plan that includes selling or merging the bank if the bank becomes undercapitalized.
Consent orders against banks have often been a final effort by the FDIC to improve a bank before forcing the bank to merge or be taken over. The FDIC has taken such actions against a number of Northeast Georgia banks since the recession hit, including Freedom Bank, Peoples Bank and Community Bank & Trust.
Directors of Hometown Community Bank are John Buchanan, chairman; Vir Nanda, Dr. Terry Elrod, Tom Kitchin, Martha Martin and Monk Tolbert.
• A stronger management team.
• Tier 1 Capital of at least eight percent and Total Risk-Based Capital of at least 12 percent.
• Raise more capital through the additional sale of stock, board contributions, or other actions and a contingency plan that includes selling or merging the bank if the bank becomes undercapitalized.
Consent orders against banks have often been a final effort by the FDIC to improve a bank before forcing the bank to merge or be taken over. The FDIC has taken such actions against a number of Northeast Georgia banks since the recession hit, including Freedom Bank, Peoples Bank and Community Bank & Trust.
Directors of Hometown Community Bank are John Buchanan, chairman; Vir Nanda, Dr. Terry Elrod, Tom Kitchin, Martha Martin and Monk Tolbert.
Sounds also like weak management? And probably aggressive lending that is now being in default status.
Sad.