Adams National Bank in Washington has an agreement with the Office of the Comptroller of Currency to boost its capital, assess its senior management team, and improve the monitoring of its loans.
The $356 million-asset bank must increase its total risk-weighted capital ratio to 12% and its Tier 1 risk-weighted capital ratio to 11% by Oct. 31, its parent, Abigail Adams National Bancorp Inc., said last week in a filing with the Securities and Exchange Commission.
Adams National was considered well capitalized as of the end of the second quarter. The capital levels in the agreement are higher than the regulatory minimums.
The bank also has agreed to improve its lending policy, hire a loan consultant to review its assets quarterly, update the appraisal of some assets, implement procedures to maintain an adequate loan-loss allowance, analyze its credit concentrations, and adopt an asset diversification program, among other things.
Adams National's credit quality has been deteriorating lately. Its second-quarter noncurrent loan ratio increased 64 basis points from a year earlier, to 3.07% of loans, according to data from the Federal Deposit Insurance Corp. The net chargeoff ratio was 2.29%, up from nearly zero.
Last month Abigail Adams hired Robert W. Walker as the chairman, president, and chief executive officer of the company and the interim president and CEO of the bank. He succeeded Jeanne Delaney Hubbard, who resigned in August.
