Cecil Bancorp in Elkton, Md., has been ordered by federal regulators to raise more capital or sell itself.

The Federal Reserve Board hit the $323 million-asset Cecil with a prompt corrective action on Aug. 7. The Fed required the company to increase its equity by selling shares, making other capital contributions, or selling to another bank. Cecil is required to take action by Nov. 7.

The Fed also banned Cecil from accepting new deposits, or renewing time deposits at a rate above prevailing rates, without prior regulatory approval. The Fed also banned bonus payments or salary increases for executives.

Cecil, which has nine branches in northeastern Maryland, lose $3.2 million in the second quarter. Its Tier 1 capital ratio was 5.02% at June 30.

Cecil is one of 21 banks that remain in the Treasury Department's Troubled Asset Relief Program; the company still owes $3.8 million in unpaid dividends tied to Tarp shares. Cecil's chief executive, Terrie Spiro, told American Banker this week that the company is putting the finishing touches on a plan to exit Tarp.

Cecil still remains subject to a June 2010 written agreement from the Fed and the Maryland Department of Financial Regulation.

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