Greater Atlantic Bank in Reston, Va., said Tuesday that it has received a cease-and-desist order from the Office of Thrift Supervision requiring it to boost capital levels and prohibiting it from accepting brokered deposits and making certain loans without the agency's approval.
The order, which went into effect Friday, also requires Greater Atlantic to update the OTS on the status of merger talks with Summit Financial Group of Moorefield, W.Va. This month Summit terminated a $13.9 million deal to buy Greater Atlantic's parent, Greater Atlantic Financial Corp., but the two companies are continuing to negotiate. The order requires the $236 million-asset Greater Atlantic Bank to develop a comprehensive operating strategy to be applied if the talks with Summit fall through.
Going forward, Greater Atlantic must stop making commercial, commercial real estate, and raw land loans without the prior written approval of the OTS' Southeast regional director.
The order also requires Greater Atlantic to maintain a Tier 1 capital ratio of at least 6% and a total risk-based capital ratio of at least 12% and stop dividend payments and other capital distributions.
Greater Atlantic's board must take action on credit administration, classified assets, and accounting systems controls. It also must establish a regulatory compliance committee of three or more nonemployee directors to monitor and manage compliance and provide the board with progress reports.
