Everything Is Fine

Looks like some banks in North Carolina are getting ready to go belly up. Should you worry your pretty little head? Of course not:

Harry Davis, an economist for the N.C. Bankers Association, was surprised by the growth in the number of troubled banks. However, like Smith, he doesn't anticipate a large number of failures.

"The reason there are so many problem banks right now isn't because they were poorly managed," said Davis, who is also an Appalachian State University banking professor. "It's because the absolute bottom has fallen out of the economy."

While one might certainly expect someone who works for the banking industry in NC to say something like the above, recent SEC filings from one troubled regional bank seem to indicate that the FDIC has had a few concerns with the quality of management at the bank being, ummmm, less than good, maybe:

� Within 90 days of the Order, develop and implement a written strategic plan covering at least three years consistent with sound banking practices to improve the Bank's operating performance;

� Within 30 days of the Order, appoint a committee of the Board of Directors that is responsible for overseeing compliance with the Order and providing progress reports to the full Board regarding compliance with the Order; and

� Develop a budget designed to improve net interest margin, increase interest income, reduce discretionary expenses, and improve and sustain earnings.

The above 8K filing was from 2009. Kinda looks like the FDIC wanted to see some managerial improvements way back then.

Not poorly managed?

� Cease to extend additional credit to any borrower who has a loan or extension of credit with the Bank that is classified as "Loss" or "Doubtful";

� Within 45 days, adopt and implement a plan regarding the Bank's liquidity, contingent funding and asset liability management and review and revise the plan on a quarterly basis;

� Not pay cash dividends without the prior written consent of the FDIC and the Commissioner;

Local journalists may want to cover this story--that is if they can pry themselves from set of Scrambled Squares. Thank goodness they have their priorities straight.