The clock is ticking for Liberty Bank in Salt Lake City.
The $12.8 million-asset bank entered into a consent order with the Federal Deposit Insurance Corp. to boost capital levels, then find a buyer or liquidate. The bank consented to the Nov. 21 order without admitting or denying any charges of unsafe or unsound banking practices.
The FDIC’s claims are tied to capital deterioration, operating losses, inaccurate books and records, and “deficiencies in management and board oversight,” the order said.
The order gives Liberty 30 days to boost its Tier 1 capital by $750,000 and 90 days to add another $500,000. The bank must maintain a Tier 1 capital ratio equal to 12% of total assets.
Liberty was given 90 days to develop a comprehensive plan, approved by the FDIC’s regional director, to liquidate itself. Over that period, the bank must enter into a definitive agreement to merge with, or sell to, an FDIC-insured bank “acceptable to the regional director.”
If unable to strike a deal, Liberty must “immediately begin to execute its plan to liquidate,” the order said.