Peoples Community Bancorp Incorporated (fka PCBI)

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Friday, April 4, 2008 - 3:02 PM EDT
Peoples Community gets cease and desist orders
Business Courier of Cincinnati

The Office of Thrift Supervision and Peoples Community Bancorp have agreed to cease and desist orders that place the West Chester bank under close oversight and limit its ability to make loans and issue lines of credit.

Peoples ran into trouble with real estate loans and its problems were compounded when a planned merger with Evansville, Ind.-based Integra Bank Corp. fell through in February.

The bank posted a third-quarter loss of $1.4 million, or 30 cents per share, compared to a loss of $3.9 million, or 82 cents per share in third-quarter 2006. For the nine-month period, Peoples reported a net loss of $1.9 million, or 39 cents per share, versus a net loss of $1.7 million, or 38 cents per share in the year-ago period.

Peoples, in a March 31 filing with the U.S. Securities and Exchange Commission, said it was not able to file its 10-K reports for the fourth quarter and full-year 2007.

The bank said in a Thursday evening news release that the orders require it to, among other things:

* File updated business plans with the OTS and, on a quarterly basis, compare projected and actual operating results;
* Receive OTS permission before declaring dividends on or payments on outstanding securities, adding or replacing a director, or hiring a CEO and making any "golden parachute" payments;
* Not make new loans or issue new lines of credit for land acquisition or development, speculative residential construction, commercial or multi-family construction, or acquisition of commercial property;
* Hire an independent consultant to review its loan portfolio and establish a plan for reducing bad loans.

"We are extremely disappointed with the change of events that brought about this situation but believe we have taken and will continue to take significant steps to deal with the current recessionary real estate market," said Jerry Williams, president and CEO, in a news release.

Shares of Peoples (NASDAQ: PCBI) fell 31 cents, to $3.70 in Friday afternoon trading.

Peoples Community is a federally chartered savings bank with 19 offices in Butler, Hamilton, Warren, Dearborn and Ohio counties.