FDIC issued consent order for Gulf State Community Bank

Another local bank is feeling the impact of the recession and real estate market collapse.

Gulf State Community Bank was one of four Florida banks to receive an enforcement order from the FDIC in November. The bank was issued a consent order from the Federal Deposit Insurance Corporation which requires that the bank take certain actions to improve its operations and strengthen its loan practices.

The FDIC said Gulf State Community Bank needs to raise capital to increase its cash on hand to at least 8 percent of the bank’s assets and have risk based capital of at least 12 percent of the bank’s risk-weighted assets.

It also needs to reduce the number of adversely classified loans on its books. Any loans classified as “Loss” should be charged off or collected and 50% of any loan classified as “doubtful” should be charged off if not collected. The FDIC has also advised that the bank not issue additional credit to certain borrowers who have loans that have gone uncollected or are adversely classified.

Gulf State Community Bank says it is working to meet the requirements of the consent order and will continue to provide loans to qualifying local customers. It adds that the funds deposited with the bank are fully insured up to the limits established by the FDIC.

Gulf State Community Bank is not the only local bank to feel the pressure from the downturn in the local housing market. Coastal Community Bank out of Panama City, which is the parent company of Apalachicola State Bank, has been operating under a cease and desist order since last May.



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