CapitalSouth Bank of Birmingham, Alabama just got a
C&D from the FRB. At the top of the bank’s to do list:
Enhanced risk monitoring policies, procedures, and practices to identify, measure, monitor, and control risks arising from concentrations of credit by industries, types of loans, and geographic locations, consistent with Interagency Guidance on Concentrations in Commercial Real Estate Lending, Sound Risk Management Practices, dated December 12, 2006 (SR 07-1)
CapitalSouth was well above the
trigger ratios for CRE lending, especially heavy on the construction and land development concentration.
- Ratio of construction loans to risk-based capital: 269% (169% over trigger ratio)
- Ratio of total CRE loans to risk-based capital: 403% (103% over trigger ratio)
Numbers based on CapitalSouth’s Sept. 30, 2008 call report.
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