Citizens National Bank issued cease-and-desist order

The U.S. Department of Treasury has issued a cease-and-desist order against Citizens National Bank of Springfield for "unsafe and unsound" banking practices, largely related to a high concentration of real estate loans.

In the April 7 order from the Comptroller of the Currency, first reported by the Springfield News-Leader this morning, bank officers are ordered to comply with a list of actions to address issues uncovered in a bank examination last October.

Bank CEO Frank Hilton said real estate lending has been the bank's forte during its 20 years of business.

"Like a lot of folks, we hoped and expected that the good real estate market and economy we've had all these years would continue, and obviously that changed," Hilton told Springfield Business Journal.

The bank is working to lower its loan totals, which are down $20 million overall since Dec. 31 through foreclosures and customers' property sales, Hilton said.

Another concern in the report is a regulatory clause that states that, in a down economy, banks must get new appraisals or reevaluate the value of all real estate loans when they come up for renewal, Hilton said.

"The requirement has been there in the regulation all along, but it's just never had to be implemented because we didn't have a declining real estate market here in the Springfield area," Hilton said.

The bank is in the process of following that rule, in addition to all of the other actions listed in the report, including submitting a three-year strategic plan, a capital plan and loan reviews.

Citizens National's daily operations have not been affected, Hilton said. The bank has four Springfield branches and one Ozark branch.[[In-content Ad]]