SAN RAFAEL -- Tamalpais Bancorp, parent company of Tamalpais Bank, is working out an agreement with the Federal Reserve Bank of San Francisco to help ensure compliance with a recent cease-and-desist order from the Federal Deposit Insurance Corp.
The Tamalpais Bancorp board of directors on Jan. 13 adopted a resolution allowing Mark Garwood, bancorp president and chief executive officer, to enter the agreement with the Fed.
Effective Jan. 14, the agreement stipulates dividends and distribution, debt and stock redemption, the capital plan, cash-flow projections, compliance with laws and regulations and progress reports.
The agreement stipulates that the bancorp will not “declare or pay any dividends without the prior written approval of the reserve bank and the director of the division of banking supervision and regulation of the board of governors of the Federal Reserve system."
Also, regarding stock, the bancorp is not allowed to purchase or redeem any shares of stock without prior written approval of the Fed.
Sixty days from the agreement, the bancorp has to submit a plan to maintain sufficient capital, as well as submit a statement of its planned sources and use of cash for debt service, operating expense and other purposes for the year.
Tamalpais Bank consented to the cease and desist order in September with the Federal Deposit Insurance Corp. and the California Department of Financial Institutions.
The order required the bank to reduce its commercial real estate loan exposure and improve liquidity. The order, which stemmed from the bank’s regular FDIC examination in May of last year, also required the bank 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.
The bank’s stock is trading at $1.33. Its 52-week range is $0.50 to $7.90.