SAN RAFAEL -- Tamalpais Bank consented to a cease and desist order with the Federal Deposit Insurance Corp. and the California Department of Financial Institutions that requires it to reduce its commercial real estate loan exposure and improve liquidity.
Among the requirements of the order, which stems from the bank’s regular FDIC examination in May of this year, are to develop a plan to reduce the number of commercial real estate loans, develop and implement a written liquidity funds management policy and for the bank to not pay cash dividends without the prior written consent of the FDIC and the DFI. (To see the full order, see below.)
“We intend to fully comply with the order, and we have made progress,” said Senior Vice President and Chief Marketing Officer Mark Chapman.
The cease and desist order does not impact deposits held in the bank. Customers are insured to FDIC limits. Nor does the order mean the bank will stop any of its normal banking operations.
Mark Garwood, the bank's chairman and chief executive officer said, "Today's current economic conditions and the resulting regulatory scrutiny are creating challenges for financial institutions of all sizes, and Tamalpais Bank is no exception. We continue to stand by our borrowers and our depositors as they have been impacted by declining retail sales, declining real estate values and this current economic storm. We are committed to working with the FDIC and the DFI to implement the actions required by the order."
The corrective actions started in February of 2008 when then-Executive Vice President Jamie Williams came to the bank and helped put together a strategic plan.
“Our order does reflect strategic initiatives that are already in place,” said Mr. Chapman.
Since that time, the bank has focused only on the Marin and San Francisco area. Previously, the bank had been making loans statewide.
“That model had been in place for a number of years,” Mr. Chapman said. “We changed it in early 2008 because we knew that would be a more profitable decision in the long run.”
The bank recently switched to a California charter. The shift, Mr. Williams said, reflected its commitment to community.
In the first quarter of 2009 the bank eliminated its wholesale loan program, closed a loan production office in Santa Rosa and stopped making SBA loans out of the area.
Following the resignation of its chief financial officer last week, the bank appointed Karry Bryan as the acting CFO effective Sept. 17.
Ms. Bryan, 43, joined the bank in August 2005 as vice president of finance and controller. She was promoted to first vice president and controller in January 2006, and to the position of senior vice president, chief accounting officer and controller in January 2007.
The bank’s stock is trading at $1.43. Its 52-week range is $0.94 to $12.98.
Tamalpais Bancorp, the holding company for Tamalpais Bank and Tamalpais Wealth Advisors, reported a net loss of $42,000 for the first quarter and a net loss of $4.3 million for the second quarter.