BANKING : Off Regulatory Hook, Landmark Bank Sees Happier Days Ahead

Executives at Landmark Bank were surprised and a little miffed a year ago when federal regulators took the drastic step of imposing a severe order requiring the bank to fix various problems. The executives thought the problems had already been fixed.

Not to worry, though Regulators lifted the order in eight months--one of the fastest turnabouts yet.

Now free of various restrictions, Landmark is concentrating on earning money again, said Craig D. Collette, the bank’s president.

“We’re cooking,” he said, beaming.

Collette expects that fourth-quarter earnings, after an ongoing audit, will equal the $330,000 earned for the first six months of 1993. And with about $208 million in loans and other assets at the end of December, the bank is looking for some growth this year, he said.

Landmark was hurt in late 1991 by an employee’s unauthorized loans, which cost the bank $2 million. The bank recovered $1.3 million from its insurance carrier.

But then regulators, worried about the lingering Southern California recession, ordered that the values of some loans backed by real estate be written down.

The bank spent 1992 and early 1993 cleaning up its books, and it is now benefiting from having taken a conservative approach. Many questionable loans were paid off, and the higher reserves the bank had socked away for possible losses turned into gains of about $1.1 million, Collette said.

“1994 is going to be great,” he said. “At least we will be sleeping well at night and smiling during the day.”