The Federal Deposit Insurance Corp. has agreed to lift a February 1994 regulatory order against Mid-State Bank.

The agency decided to remove the order in January after the $775 million-asset bank's financial condition improved.

Bank officials said in a news release that they will continue to cut back bad assets, maintain a sufficient loan-loss reserve, boost profits, and divest the company's real estate development subsidiary, Mid-Coast Land Co.

The bank had already received an extension for that divestiture, until Dec. 31, 1998, with authority to extend it further if necessary.

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