Fed gives Beach First 60 days to submit plan

Beach First National Bancshares was told by the Federal Reserve Board on Wednesday to halt payment of dividends and to submit a new plan to maintain adequate capital.

In a written agreement between the Federal Reserve Bank of Richmond and Myrtle Beach-based Beach First, the Fed said the bank holding company shall not declare or pay dividends, purchase or redeem shares or take any other actions that reduce the capital of Beach First National Bank without regulatory approval, according to Reuters.

The Fed said Beach First had 60 days to submit to the Richmond Fed an acceptable written plan to maintain sufficient capital at Beach First on a consolidated basis.

The plan needs to take into consideration the bank’s classified credits, concentration of credits, allowance for loan and lease losses and projected earnings and asset growth, the Fed said. Beach First must submit quarterly progress reports to the Fed, Reuters reported.

The Fed order comes just over three months after another regulator, the Office of the Comptroller of the Currency, ordered Beach First to submit a revised three-year capital plan.

Beach First announced earlier this month that it lost a staggering $30 million in 2009. That’s a substantial increase over 2008, when it lost $3.7 million.

Over the past year, Beach First has seen its assets decline more than 8 percent, to $613 million, according to information filed with the US Securities and Exchange Commission.

Stock in Beach First is trading for around $1.10 a share.

The company replaced CEO Walt Standish earlier this month on an interim basis with John S. Poelker.

Standish retained the title of president of both Beach First National Bancshares and Beach First National Bank.