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.
Struggling lender Community First Bank & Trust has signed an agreement to sell its prominent Cool Springs office at Carothers Parkway and Bakers Bridge Avenue to $1.1 billion-asset First Citizens National Bank of Dyersburg. The deal is Community First's second attempt at unloading its lone Williamson County outpost. Earlier this summer, an agreement to have CapStar Bank take it over fell apart over pricing.
The demise of CapStar Bank's planned acquisition of the Cool Springs branch of Community First Bank & Trust got us looking back through the latter's recent regulatory filings. There, we found word that the bank holding company's board of directors late last month kicked CPA firm Crowe Horwath to the curb in favor of Horne. There were no material disagreements between Crowe and Community First, which is under order to quickly boost its capital ratios.
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.
Community First Bank & Trust has struck a deal to sell its only Murfreesboro office to six-year-old Southern Community Bank for an undisclosed amount. The deal, which officials expect to close this quarter, will bring some much-needed cash into Community First. Regulators last fall told bank executives they needed to raise almost $18 million by year's end.