Bank regulators have notified the parent company of Community West Bank that it must get approval from the Federal Reserve System before paying out dividends, selling stock, or incurring debt, according to an April 23 agreement.
In the document, Community West Bancshares, headquartered in Goleta, agreed with the Federal Reserve Bank in San Francisco to submit cash flow projections and a plan to maintain capital within 60 days. The bank must also submit quarterly progress reports.
The agreement comes months after a similar order from the U.S. Department of the Treasury on Jan. 26, which required the bank to raise its total risk-based capital ratio to 12 percent of risk-weighted assets, as well as a three-year plan to maintain cash flow. If the bank fails to meet the standards, it could be deemed “undercapitalized” by the comptroller of the currency, the order states.
Community West Bank, in an April 24 filing with the U.S. Securities and Exchange Commission, has said it is “taking corrective actions” to remedy the issues. The bank has several branches on the Central Coast, including one in Santa Maria. It recorded a net loss of $10.5 million in 2011 and hasn’t yet reported its 2012 first quarter numbers.
This article appears in May 3-10, 2012.