Federal Reserve puts Cecil Bank on notice for capital deficiency

Cecil Bank

90 days to come up with sufficient capital or face actions that could  lead to another bank acquiring its operations.

Click on the link below fora copy of the order.

 Cecil  bank

The decision came earlier this month from the Fed and follows years of loan problems at the Elkton, MD-based bank.

The bank has also been under the supervision of Maryland bank regulators.

Last fall, the assets of  long time Cecil County  bank, NBRS (formerly National Bank of Rising Sun) were acquired by Howard Bank.

NBRS, which survived the Great Depression, could not overcome bad loans and like Cecil Bank had been under close scrutiny by regulators.

Cecil Bank, which in the past lent money to businesses in neighboring New Castle County, DE, sold its  Aberdeen branch to Howard Bank.

However, the Fed did not deem the actions taken so far  to be sufficient in building a minimum capital base.

The bank continues to operate normally in terms of deposits. Depositors are insured up to $250,000.

Even banks that are well capitalized have chosen to merge with larger entities as the costs of regulation continue to grow after the  near collapse of the financial system in 2008 and 2008.

Across the line, another  casualty was Wilmington Trust, which was sold to M&T at a fraction of its former value, due to loan problems.

Former executives of the bank are now facing federal charges related to allegations that the extent of the problem loans at the bank were concealed from shareholders and regulators.