Southern
First Bank N.A.,
which received $17.3 million in taxpayer aid last year, signed an enforcement
agreement with the Office
of the Comptroller of the Currency last month, according the
regulator's most recent release of bank enforcement actions.
Southern
First Bank is based in Greenville, S.C., and is the lone subsidiary of holding
company Southern First Bancshares Inc., which was the recipient of the Capital
Purchase Program aid.
In
its June 8 agreement with Southern First, the OCC cited
"unsafe and unsound" practices at the bank related to credit
administration, credit risk management, and liquidity risk management.
The
six-branch bank was ordered to overhaul its lending policies and reduce
its credit risk, largely by strengthening its underwriting standards in its
commercial real estate portfolio.
Art Seaver, the bank's chief executive, told The Greenville News in June, shortly after the
company divulged the order in a Securities and Exchange Commission filing, that the issues the OCC found date
largely to the first half of 2009 and have already been addressed.
The
findings were based on a bank examination as of March 31, 2009, according to the
company. "Since the completion of the examination, the board of directors
and management of the bank have aggressively worked to address the findings of
the exam and has developed formal action plans to comply with any remaining
requirements of the formal agreement," the company said in a filing. "In addition, entry into the
formal agreement does not change the bank's 'well-capitalized' status as of the
date of this current report."
The
company's net income for the fist six months of the year was $113,000, compared
to $843,000 for the first of 2009, according to the company's most recent
quarterly report.
The
company attributed the dip to a $2 million additional provision for loan
losses.
The
bank's nonperforming assets are at 2.4 percent -- up from 1.77 percent a year
ago -- but still well-above the average rate of 5.19 percent among South
Carolina banks.