The Federal Reserve has entered into a written agreement with Liberty Bancorp of Clayton, Ga.
Liberty is barred from making payments to shareholders and certain debtholders without regulatory approval. Liberty, the holding company for the $213 million-asset Rabun County Bank, also agreed to serve as a source of strength for the bank, according to the Oct. 30 agreement that the Fed released on Thursday.
The agreement also obligates Liberty’s board to ensure Rabun County’s compliance with a January 2012 consent order with the Federal Deposit Insurance Corp. that requires the bank to retain qualified management and boost capital. The FDIC order gave Rabun 90 days to achieve Tier 1 capital of at least 8% of total assets and total risk-based capital of at least 10%.
At June 30, Rabun County’s Tier 1 capital ratio was 11.16% and total risk-based capital ratio was 12.47%, according to the FDIC.
Rabun County’s agreement with the FDIC also required the bank to address certain loan losses that were flagged in a July 2011 bank examination. That agreement also barred the bank from lending to any borrower whose loan was in default and ordered management to submit written plans for reducing troubled loans and improving earnings, funding and lending practices.
The Fed also lifted a written agreement against Macatawa Bank (MCBC) in Holland, Mich., on Oct. 26.
