Greater Atlantic Financial Corp. said Tuesday that its subsidiary bank received a notice from the bank regulator stating that the bank is "undercapitalized."

The Office of Thrift Supervision said in the notice that Greater Atlantic Bank is undercapitalized based on the regulatory capital ratios the bank reported in its thrift financial report for the period ended Dec. 31, 2008.

Accordingly, the bank is now subject to the restrictions on asset growth, dividends, other capital distributions and management fees, according to a filing with the Securities and Exchange Commission.

The notice also requires the bank to file a written capital restoration plan with the OTS by March 16, the filing said.

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