Feds advise Superior bank to monitor at-risk borrowers

The National Bank of Commerce in Superior must do due diligence on its at-risk credit clients and follow stringent reporting requirements after federal regulators found “unsafe and unsound banking practices” relating to the bank’s credit administration.

The findings came after an extensive review last fall by the Comptroller of the Currency, the federal agency that supervises national banks.

“It was not unexpected that they asked us to improve some lending practices,” bank Vice President Bruce Thompson said. “We’ve gone through a couple of years of stress with the recession. All our customers were feeling the stress.”

According to an agreement between the federal agency and the bank, which lays out a plan of action to correct the problem, the bank must do timely reviews of some clients’ accounts whose collateral are at risk or whose businesses are struggling.

“It wasn’t a case of defaulted payments,” Thompson said. “There’s no problem with payments at this time. But if a business continues to perform at current levels, we can foresee there may be difficulties in making payments.”

For those clients, the bank must closely follow individual client workout plans and do regular account reviews. The bank also must weigh credit risk of some commercial clients more diligently.

“We will work with them to turn that around,” Thompson said. “It’s forward thinking.”

Thompson said the bank — which is part of the National Bank of Commerce with $570 million in assets — remains sound.

Most bank customers won’t be affected by the added scrutiny, but those with credit at the bank may feel an impact, he said.

“We need to be working much more closely with our customers,” he said. “We’re trying to work to a good resolution.”

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