Citing low capital reserves in each case, government regulators have reprimanded three community banks.

The Federal Reserve Board on Thursday released a prompt corrective action against Zia New Mexico Bank, Tucumcari, N.M. The $16.8 million- asset bank was ordered to increase its equity or find a buyer by Feb. 28. Zia New Mexico was also instructed to cut the interest rates it offers on deposit accounts and restrict the bonuses given to senior officers.

This order, signed Jan. 26, does not address another Fed action against the bank from last December. At that time, the bank's management was instructed to speed up its year-2000 preparations.

Separately, the Federal Deposit Insurance Corp. released two cease-and- desist orders.

Bank of Honolulu was cited for operating with "inadequate internal routine and control policies" and without adequate capital. The agency also said the bank was "operating in such a manner as to produce operating losses."

The $93 million-asset bank was ordered to retain qualified management and boost its tier 1 capital to equal 8% of the bank's assets.

Bank of Honolulu is also instructed to add a fifth member to its board. The new director is not allowed to be a relative of another board member or an employee of the bank.

The FDIC also made public its order against Pacific Thrift and Loan Co. The order came only weeks after the $181 million-asset thrift had received a prompt corrective action order.

Though the prompt corrective order dealt only with Pacific's capital levels, the cease-and-desist also offered suggestions to improve the thrift's internal policies and management structure.

In a Dec. 31 press release, Pacific Thrift management said they were taking actions to comply with the terms of the order.

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