Commonwealth Savingshares in Ala. Hit with Enforcement Action

The Federal Reserve Board has issued an enforcement action against the holding company of an Alabama bank.

Commonwealth Savingshares in Huntsville, Ala., entered a written agreement with the Fed on Feb. 5. The agreement bars the company from paying dividends or taking on debt without regulatory approval, the Fed said Tuesday. 

Commonwealth is the parent of the $198 million-asset SOUTHBank and another bank in Florida. Both banks have been operating under consent orders with the Office of the Comptroller of the Currency since last March.

The OCC's consent orders required the banks to appoint compliance committees, adopt strategic plans and hold Tier 1 capital of at least 9% and total risk-based capital of at least 13%. The banks both have Tier 1 ratios of 9.88% and total risk-based ratios of 18.07%, according to the Federal Deposit Insurance Corp.

Commonwealth Savingshares has been operating under a cease-and-desist order with the Office of Thrift Supervision since 2010. The Alabama bank has 12 branches in Alabama, Mississippi, Arkansas and Texas. The Florida subsidiary has one branch.