Farmington Hills bank told to sell or merge

The Federal Reserve System's Board of Governors has ordered Michigan Heritage Bank in Farmington Hills to find a buyer or merge with another bank by Wednesday because it is "critically undercapitalized."
The move follows two recent "cease and desist" orders issued by the Federal Deposit Insurance Corp. to University Bank in Ann Arbor and West Michigan Community Bank in Hudsonville. The cease and desist orders are issued by the FDIC to stop banks from committing unsafe or unsound banking practices and violations of laws and regulations.
And last month, the Office of Thrift Supervision ordered Home Federal Savings Bank in Detroit to find a buyer or merger partner by Wednesday.
The government orders reflect the struggles that many Michigan small banks are facing as they cope with the prolonged economic downturn in the state. Though only one Michigan bank -- Main Street Bank in Northville -- has failed in the past year, the number of problem banks continues to rise and more banks are operating under cease and desist orders.
Michigan Heritage, established in March 1997, has $180 million in assets and branches in Novi and Wixom. It lost $3.4 million in the fourth quarter of last year.
A Michigan Heritage executive was not available to comment. Raymond Biggs II, its CEO and president, is no longer with the bank.
The Federal Reserve System ordered Michigan Heritage on April 1 to take other actions including increasing its equity through the sale of shares and restricting bonuses and compensation increases to senior executive officers.
Deposits at Michigan Heritage are insured by the FDIC up to $250,000