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Brokered Deposits

3 Months Ended

Mar. 31, 2017

(14)

Brokered Deposits. Under the terms of the Consent Order, the Bank is not permitted to solicit brokered deposits. In March 2017, the FDIC notified the Bank that it considers a significant portion of the Bank’s certificates of deposit to be brokered deposits due to the rates paid on such deposits, even though such deposits were not obtained through any deposit brokers. The Bank has requested a waiver of the prohibition on brokered deposits from the FDIC. If this waiver is not granted, then the Bank would not be able to accept, renew or rollover the existing certificates of deposit that are viewed as brokered deposits, which would likely have an adverse effect on the Bank’s liquidity. As of March 31, 2017, the Bank had $30.8 million in brokered deposits that mature over the next two years. Management is exploring all alternatives to resolve this issue including, but not limited to, raising local deposits.