Regulators have ordered the banking unit of AB&T Financial Corp. in Gastonia, N.C., to improve its asset quality and evaluate its allowance for loan losses.

Under a consent order effective Feb. 1, Alliance Bank & Trust Co. must assess management’s ability to “operate the bank in a safe and sound manner” and improve earnings, risk management and liquidity, the $215.8 million-asset AB&T said in a regulatory filing on Tuesday.

Alliance must hire a consultant to analyze its management needs and then develop a plan to incorporate the consultant’s findings. Within 60 days of the order, the bank must perform an assessment of the risk posed by its home equity lines of credit and develop a plan to reduce this risk.

The order, issued by the Federal Deposit Insurance Corp. and the North Carolina Office of the Commissioner of Banks, also requires Alliance to maintain a Tier 1 capital ratio of at least 8% and a total risk-based capital ratio of at least 11%. At Sept. 30, the bank had a Tier 1 risk-based capital ratio of 11.11% and a total risk-based capital ratio of 12.37%, according to FDIC data.

The bank must eliminate all assets classified as a loss and half of those listed as doubtful. Alliance must also determine if its allowance for loan and losses is adequate. At Sept. 30, 9.07% of the bank’s loans were not current, according to FDIC data.

In an October regulatory filing, AB&T reported in a loss of $2.6 million for the first nine months of 2011.

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