Bank holding company Community First Inc. continues to make progress toward the capital levels imposed on it by the Federal Deposit Insurance Corp. in September 2011 even though it posted only a tiny first-quarter comprehensive profit. The parent of Community First Bank & Trust now needs $7 million in capital to meet the FDIC's heightened requirements, which means it may still have put its shareholders through a very dilutive stock offering. But the gap is now $4 million smaller than it was at the end of 2012, which was itself a decent improvement from Q3's $15.3 million.

Another note from the company's quarterly report filed last week: Because Community First has missed six straight dividend payments on the $18 million of preferred stock it sold to the U.S. Treasury four years ago, the feds now have the right to put two representatives on the company's board.

The parent of Community First Bank & Trust out of Columbia posted a third-quarter net loss of $1.7 million, a number that would have been higher but for almost $700,000 in gains from the sale of securities. Community First Inc., which has been operating under various regulatory orders for almost two years, has been steadily adding to its capital cushion in the last two years. The pending sale of its high-profile Cool Springs branch will bring in more cash. And shedding more assets will help, too. But CEO Louis Holloway and his team still have a lot of heavy lifting to do: The company needs $15.3 million to meet the heightened capital requirements laid out by the Federal Deposit Insurance Corp.

After a brief delay due to superstorm Sandy, officials at the U.S. Treasury on Thursday wrapped up their latest auction of their preferred stock and subordinated debt holdings in 11 community banks from around the country. Among the investments up for sale was $8.7 million worth of preferreds issued by the parent of Lebanon's First Freedom Bank. A successful auction will make six-year-old First Freedom the fourth area community bank holding company to exit TARP's Capital Purchase Program, following the parent companies of Avenue Bank, Pinnacle Bank and Clarksville's F&M Bank.

Federal Reserve examiners last week sounded the all clear on MidSouth Bank about 21 months after ordering its directors and managers to boost capital and improve their operational oversight. Since mid-2010, MidSouth Chairman and CEO Lee Moss and President and COO Dallas Caudle have overseen a 20 percent cut in the $240 million bank's loan portfolio and boosted its total risk-based capital ratio by almost 3 percentage points to more than 17 percent. And even though past-due loan levels remain high, MidSouth in 2011 posted a profit of more than $1 million.

SEE ALSO: Details of the Fed's August 2010 order

The Federal Reserve Bank of Atlanta has told the management and board of Community First Inc. in Columbia to step up their efforts to raise capital. The agreement, which Community First officials said in their recent annual report they were expecting between the two parties, also reiterates that Community First is not allowed to pay out any dividends.

Community First Bank & Trust finished 2011 with total capital of $34.0 million, about $17 million short of where regulators said it needed to be. Parent company Community First Inc. has lost more than $46 million in the past three years and has signed deals to sell branches in Murfreesboro and Cool Springs. But the proceeds of those sales likely will not be enough to adequately boost the bank's capital.