Central Progressive Bank, based in Lacombe and with a branch in Denham Springs, has been issued a cease and desist order by the FDIC. This doesn’t mean the bank will be shut down, but it does mean the FDIC found evidence of “unsafe or unsound banking practices” and possible violations of laws and/or regulations. Details of the order reveal 13 specific issues turned up by the FDIC, including operating with insufficient capital protection for assets; operating without adequate earnings “to fund growth, support dividend payments and augment capital”; and operating with “an excessive level of adversely classified loans or assets.” The order also cites Central Progressive for operating “with an excessive level of delinquent and non-accrual loans” and “without a viable strategic plan,” with management policies that are “detrimental to the bank and jeopardize the safety of its deposits.”
According to the order, the bank waived its right to a hearing and entered into a consent decree in which the bank agreed to comply with the order, operate “in a safe and sound manner,” obey laws and regulations and “restore all aspects of the bank to a safe and sound condition.” Sid Seymour, chief examiner with the Louisiana Office of Financial Institutions that works with the FDIC on bank examinations, could not detail the bank’s possible violations, but he did say the order is a routine mechanism intended to keep banks sound.
Greg Beuerman of Central Progressive says the bank is working with the FDIC and OFI to comply with the order and strengthen the position of the bank. “Our capital remains very strong. Our liquidity is excellent and we have been able to assure our loyal customers that that their deposits are safe and that CPB is making progress toward even greater improvement in our financial condition,” Beuerman says.
The bank has 21 locations in Livingston, St. Tammany, Tangipahoa and Washington parishes. Central Progressive Bank has more than $600 million in assets. Click here to read the FDIC’s Cease and Desist Order.—Steve Clark and Anna Thibodeaux
This story has been changed since it was first published