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Brentwood Bank Ordered to Boost Capital

July 01, 1999|Edmund Sanders

Brentwood Bank of California, a small Brentwood-based bank with about $60 million in assets, has been ordered by regulators to boost its capital by $2.5 million and weed out problem loans, according to a cease-and-desist order announced by the Federal Deposit Insurance Corp. An FDIC audit earlier this year uncovered "unsafe or unsound banking practices," including inadequate management, inadequate reserves and lax collection practices, all of which contributed to the bank's recent losses. Brentwood Bank consented to the FDIC order, which was formally issued in May, without admitting or denying the allegations and agreed to take steps to improve its operations. Brentwood's newly appointed president, Jack Feldman, who took the helm at the bank in January after serving as president of Bank of Los Angeles, said Brentwood recently sold stock to boost its capital by the required $2.5 million and hopes to raise another $1.5 million. Feldman also said the bank, which ran into problems by making personal loans, is working to improve the quality of its loan portfolio. The bank, which is primarily involved in commercial lending, saw its delinquency rate jump last year to 4.9% of total loans, up from 1.9% a year earlier. Feldman predicted Brentwood would return to profitability next year after seven years of losses.

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