BANKING

Regulators Issue Order: Federal banking regulators have issued a cease and desist order against Landmark Bank, requiring it to take steps to correct internal procedures, bad loans and management problems. But bank executives figure they did everything required--before the order was issued.

The order, the most drastic action regulators can take short of seizing an institution, was made public this week by the Federal Deposit Insurance Corp. It was issued in mid-December against the La Habra bank.

The order is based on a federal examination of the bank last year, an exam that followed three weeks of expected--and unexpected--expenses at Landmark.

In the first two weeks of December, 1991, the bank spent $2-million cash and gave $2.5 million in stock to acquire Founders Bank in Brea and the Placentia branch of another bank. In the third week, it learned that a loan officer illegally advanced money to borrowers, leaving the bank with a $2-million charge against earnings.

The bank began tightening procedures and controls immediately, but regulators walked in during the middle of its changes.

“When you take a $2-million hit, I guess the regulators have to do something,” said Craig D. Collette, Landmark’s president. “But I did not expect a C&D; order.”

He said that the bank now complies with all aspects of the order.