Wednesday, September 29, 2010
FDIC accuses First Bank and Trust of unsound practices. By Walter Pierce
Data compiled by the Federal Deposit Insurance Corporation shows that New Orleans-based First Bank and Trust sustained heavy losses in the first half of 2010, particularly in the second quarter, by over-extending itself primarily in the real estate market. As a result, FBT was one of 75 financial institutions nationwide to face FDIC regulatory action - in FBT's case, the bank was issued a cease and desist order. The CDO is of interest to depositors locally because FBT has branch locations on Camellia Boulevard and Johnston Street in Lafayette.
Wednesday, September 29, 2010
FDIC accuses First Bank and Trust of unsound practices. By Walter Pierce
Data compiled by the Federal Deposit Insurance Corporation shows that New Orleans-based First Bank and Trust sustained heavy losses in the first half of 2010, particularly in the second quarter, by over-extending itself primarily in the real estate market. As a result, FBT was one of 75 financial institutions nationwide to face FDIC regulatory action - in FBT's case, the bank was issued a cease and desist order. The CDO is of interest to depositors locally because FBT has branch locations on Camellia Boulevard and Johnston Street in Lafayette.
The FDIC summary of First Bank's portfolio shows the bank had just more than $655 million in loans during the first half of 2010, and the vast majority of those loans were in real estate; of the $655 million, only $119 million are in commercial loans.
While FBT's loan loss provisions were $10.7 million in the Jan. 1-June 30 period this year - that is, capital reserves set aside to cover potential losses on loans - FBT lost $10.8 million in the same period.
FBT accepted more than $45 million in federal TARP funds. FBT was ordered by the FDIC to submit a capital plan within 90 days and to execute the plan within 30 days of approval by regulators.
According to the consent order between the FDIC and FBT, the bank is not "admitting or denying any charges of unsafe or unsound banking practices or violations of law or regulation."
FBT President and CEO Gary Blossman did not return a phone call seeking comment for this story.