San Joaquin Bancorp and its subsidiary San Joaquin Bank have mutually agreed to enter into a written agreement with the Federal Reserve Bank of San Francisco and the California Department of Financial Institutions.
According to San Joaquin Bancorp, the common goal of the agreement is to take affirmative actions to improve the bank’s operations and address the current economic environment impacting San Joaquin Bancorp and the bank.
The written agreement requires that the bank take certain steps to strengthen its credit risk management and loan review function, address loan policies and procedures, add loan adjustment and credit administration staff to assist with reducing classified loans, refine its methodology for the allowance for loan losses, submit a strategic plan related to earnings and annual budgets and adopt a plan related to maintaining liquidity and funds management.
San Joaquin Bancorp also confirmed in the agreement certain steps it had previously announced concerning a suspension of dividends or other distributions related to its trust preferred securities and adoption of a capital plan to maintain sufficient capital at San Joaquin Bancorp on a consolidated basis and the bank on a stand-alone basis.
The agreement does not restrict San Joaquin Bancorp or the bank from transacting its normal banking business. All customer deposits remain fully insured to the highest limits set by the FDIC, said San Joaquin Bancorp.
Bart Hill, president of San Joaquin Bancorp, said: The agreement is a joint plan to maintain the financial soundness of San Joaquin Bancorp and the bank. Management and the board of directors have been actively working with the Federal Reserve Bank of San Francisco and the California Department of Financial Institutions since last year with regard to the matters outlined in the written agreement. For this reason we have already implemented a plan designed to achieve full compliance with the written agreement.
