SAN RAFAEL -- The Federal Deposit Insurance Corp.  issued Tamalpais Bank a directive Feb. 19 requiring that within 30 days the bank either sell enough stock to be "adequately capitalized," or accept an offer to be acquired by or combined with another institution.

The directive, signed by J. George Doerr, the deputy regional director of risk management for the division of supervision and consumer protection of the FDIC, stated that Tamalpais Bank is “a significantly undercapitalized depository institution as that term is defined” by the Federal Deposit Insurance Act and the FDIC Rules and Regulations and that the bank’s “condition continues to deteriorate.”

The bank is allowed to file a written appeal of the directive within 14 days of the directive, or March 16. As of today, the bank had not filed an appeal.

Tamalpais Bancorp is currently working out an agreement with the Federal Reserve Bank of San Francisco to help ensure compliance with a recent cease-and-desist order. Tamalpais Bank consented to the 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.

Tamalpais Bancorp’s wealth management unit is merging into San Francisco-based CSI Capital Management Inc. Under the terms of the agreement, Tamalpais Bancorp will share revenues from clients referred to CSI for a period of five years.