- Key insight: Community Bancshares was grappling with credit-quality issues for more than a year before it unveiled Phoenix Lender Services.
- Supporting data: The company's ratio of nonperforming assets to total loans topped 10% at the end of 2025.
- Forward Look: Under a cease-and-desist order with the Federal Reserve, the bank must improve board oversight, strengthen its senior management ranks and consider a capital raise.
A Georgia community bank that
Community Bankshares in LaGrange, Ga., agreed to a cease-and-desist order with the Federal Reserve. The action, announced Thursday, requires the $288 million-asset company to improve board oversight, strengthen its senior management ranks and consider a capital raise.
The cease-and-desist order bars Community from paying dividends, repurchasing shares or engaging in any other capital distributions.
Jeremy Gilpin, who serves as chairman of Community Bankshares and CEO of its bank subsidiary, Community Bank & Trust — West Georgia, did not respond to a reporter's request for comment by deadline.
Community announced its government-guaranteed-lending initiative in January 2025. It did so despite experiencing high levels of nonperforming loans throughout 2024, according to Federal Deposit Insurance Corp. data.
The delinquency trend continued into 2025. Indeed, at year end, Community Bank & Trust reported a ratio of noncurrent loans to loans of 10.15% — significantly higher than the industry-wide average of 1.56%.
Community Bankshares and its banking subsidiary had been involved in Small Business Administration and United States Department of Agriculture lending prior to 2025, when they expanded those business lines.
As part of the expansion, the company unveiled a new subsidiary, Phoenix Lender Services. The plan was for Phoenix, which continues to operate, to act as a full-spectrum provider for Community Bank & Trust and other Main Street lenders. It would originate, service and sell both SBA and USDA loans.
Phoenix was able to generate significant loan volume. It reported that it aided in the origination of $325 million in SBA and USDA loans during the government's 2025 fiscal year, which closed Oct. 1.
Gilpin said in a November 2025 press release that the unit was targeting combined originations of $300 million in fiscal 2026. During that time, Community Bank & Trust grew rapidly, from $216.6 million of assets at the end of 2024 to $288.2 million on Dec. 31, 2025.
According to SBA statistics, Community Bank & Trust has originated 7(a) loans totaling $122.5 million so far in fiscal 2026. Under both 7(a) and the USDA, the government guarantees loans originated by private lenders.
Community had tapped Chris Hurn, a longtime SBA lender, to serve as president and CEO of Phoenix as well as Community Bankshares.
However, Hurn left the company in October and later filed suit a month in U.S. District Court for the Northwest District of Georgia. In court filings, Hurn claimed he agreed to join the company and invested $2 million, only to be terminated after a dispute over compensation.
Hurn is suing Community Bankshares for the return of his $2 million investment as well as other money he said the company owes him. Hurn declined to comment, citing the ongoing litigation.
The Community Bankshares cease-and-desist order is the first to be issued by the Federal Reserve Board in 2026. It followed an examination that the Federal Reserve Bank of Atlanta completed in January.
Community Bank & Trust was profitable in 2025, reporting full-year net income totaling $4.5 million, but a key capital ratio has been falling.
The bank reported a Common Equity Tier 1 capital ratio of 8.41% as of Dec. 31, comfortably above the 4.5% regulatory minimum but down from the 9.45% ratio reported at the end of 2024, according to FDIC statistics.
