SAN RAFAEL -- Tamalpais Bank has sold $37.4 million in nonperforming loans to an anonymous third party investor.

The bank received $24.1 million in connection with the sale. The proceeds from the sale are primarily being used to reduce outstanding borrowings, according to the filing with the Securities and Exchange Commission.

The bank will incur a pre-tax charge of approximately $4.6 million to its fourth quarter earnings as a result of the sale. Tamalpais Bank reported a $71 million loss at the end of the third quarter.

This sale comes only a few months after Tamalpais Bank consented to a cease and desist order with the Federal Deposit Insurance Corp. and the California Department of Financial Institutions requiring 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.

On Nov. 20, the determination to sell the loans was made following a nationwide bidding procedure. All of the loans sold by the bank were commercial and multi-family loans secured by properties located in San Francisco.

The bank's last share trade was $0.95. Its 52-week high was $9.73 per share.