Statewide Bank has been issued a cease-and-desist order from the FDIC. The Covington-based bank still is in business, but it has been asked to stop a dozen unsound practices, including operating without a comprehensive strategic plan, maintaining an inadequate level of capital protection, engaging in hazardous investment practices and operating in violation of Federal and state laws and regulations. The FDIC asked Statewide to take a number of corrective measures, including recruiting a qualified investment advisor, maintaining leverage capital ratios, coming up with a plan to reduce and collect delinquent loans and developing a strategic plan. The order was dated March 25, and the FDIC ordered the changes to be finished over the next two to three months.
Matt Faust, Statewide’s president/CEO, said the FDIC report came out of an annual evaluation that happened in August 2008. “Statewide Bank’s quarterly progress report, which was submitted just yesterday to the FDIC, indicates that the bank has addressed, met or even exceeded the benchmarks set forth by the FDIC,” he says. Faust adds that the FDIC has verbally acknowledged Statewide’s progress, but the measures won’t be acknowledged until the reporting period later this year.
Statewide, which has Jack Mendheim of Baton Rouge serving as chairman of the board, is the second regional bank in recent months to get a cease-and-desist order from the FDIC. Central Progressive Bank, based in Lacombe, got one in February. Statewide, which also has branches in Slidell, Folsom, Mandeville and Abita Springs, has assets of $271 million. To read a copy of the order, click here.—Timothy Boone
