FDIC puts struggling bank on notice

The Federal Deposit Insurace Corp. has ordered a New York bank to take "prompt corrective action'' to boost its capital levels or find a buyer or merger partner.

USA Bank, of Port Chester, N.Y., was put on notice Dec. 8, according to a summary of enforcement actions the FDIC released late last week.

Two other banks received similar notices in December - Horizon Bank of Bellingham, Wash., and Columbia River Bank of The Dalles, Ore. Both were seized by regulators this month, and their assets and deposits absorbed by other financial institutions.

The FDIC ordered USA Bank to submit a capital restoration plan to its New York office within 30 days. The bank was told to raise enough capital to qualify as "sufficiently capitalized'' under regulatory standards, through the sale of stock, an equity injection by existing shareholders or other means acceptable to the agency.

Failing that, the FDIC said, the bank must find a buyer or merger partner.

USA Bank had roughly $223 million in assets as of the end of September. It lost $4.07 million in the third quarter of 2009, largely because of higher provisions for loan losses, according to a Securities and Exchange Commission filing. The bank lost $118,484 in the same period of 2008.

Because of the lag in the publication of the FDIC order, USA Bank's 30-day action period has already passed. It is unclear from the bank's   public statements what steps it took.

USA Bank announced in November that it hired an investment banking firm, Laidlaw & Co., to help it find a strategic partner and secure additional capital.

USA Bank lost $8.86 million through the first nine months of 2009, compared with $1.25 million a year earlier.