The Federal Reserve has ordered Britton & Koontz Capital (BKBK) to obtain the regulator’s approval before making a number of strategic moves.
The Natchez, Miss, company must get the Fed’s blessing at least 30 days before it can take on new debt or amend existing debt; pay or declare a dividend; redeem stock; or distribute principal or interest on its trust-preferred securities. Britton & Koontz suspended its dividend in the fourth quarter.
The $357 million-asset company disclosed the new requirement in a document filed Wednesday with the Securities and Exchange Commission. Britton & Koontz’s board adopted the requirements, at the Fed’s request, on Friday.
Britton & Koontz was already operating under a formal written agreement from the Office of the Comptroller of the Currency, adopted in February. Under terms of that agreement, the company is required to reduce credit risk, develop a risk-rating plan, and obtain updated appraisals on problem loans secured by real estate. That order was intended to clean up the loan portfolio at Britton & Koontz Bank.