Community West Bancshares must ask for regulatory approval before selling stock, paying dividends or taking on new debts, according to a new federal banking decree.
The parent company of Goleta-based Community West Bank agreed to a develop a plan to maintain sufficient capital that will include “current and future capital requirements on a consolidated basis and compliance with federal regulations.” This was in response to the Federal Reserve Bank of San Francisco’s newest consent order; Community West agreed to a three-year plan when regulators filed similar charges in January. Regulators told the bank that it must boost its total risk-based capital ratio to 12 percent.
“The board shall adopt and take the necessary steps to implement corporate governance and decision-making processes to correct the bank’s deficiencies in management leadership and board oversight,” the original order reads.
Without taking a stance on the charges, the bank said it will “take the following corrective actions to address certain alleged violations of law and/or regulation.”
The bank was tasked with reporting to a Compliance Committee by Feb. 29 that monitored the bank’s monthly adherence to the order’s provisions.
Community West President/CEO Martin Plourd said in a release that the company restructured in February by reducing expenses, consolidating the SBA division, concentrating on real estate lending and expanding its business programs.
“This reorganization will reposition the bank by realigning our business initiatives and returning to our community banking roots to optimize the bank`s profit potential,” said the release, dated Feb. 29. “The bank will provide quality products, services and support through cost effective delivery channels for our customers` financial services needs in order to meet our strategic financial goals and objectives. These strategies should lead to fundamental improvements in the bank`s capability to produce operating earnings.”
The bank recorded a net loss of $10.5 million in 2011 compared with net income of $2.1 million the previous year. It hasn’t published its first-quarter results yet.