Naugatuck Valley Financial (NVSL) in Connecticut has been hit with a regulatory enforcement action.

The Federal Reserve Board hit Naugatuck Valley with a memorandum of understanding on May 21, the $526 million-asset company said late Friday. The agreement requires the company to submit cash-flow projections and quarterly reports and bars it from paying dividends, taking on debt or changing its senior management without Fed approval.

Naugatuck Valley also reported Friday that it lost $591,000 in the first-quarter, compared to a $2.7 million loss a year earlier. Net interest income fell 13% from a year earlier, to $4.3 million, but a lower loan-loss provision helped the company narrow its losses.

The Nasdaq had warned Naugatuck Valley that it faced delisting over a delay in filing its first-quarter earnings report, which the company attributed to the hiring of a new chief financial officer. The company hired James Hastings from Southern Community Bank and Trust in Winston Salem, N.C., to fill that role in April, replacing interim CFO Thomas Van Lenten.

The company's Naugatuck Valley Savings and Loan is well-capitalized, with a 9.85% Tier 1 leverage ratio and total risk-based capital of 16.09% on March 31, according to the Federal Deposit Insurance Corp.

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