ROCKY MOUNT, N.C. -- Pioneer Bancorp Inc. said federal regulators had rejected its capital plan and were seeking a consent agreement that could lead to a sale or regulatory takeover of its subsidiary, Pioneer Savings Bank.

The $421 million-asset Pioneer Savings said the Office of Thrift Supervision had turned down the plan it filed in November 1991.

The bank said examiners had requested additional loan loss reserves, writedowns, and other adjustments that would reduce Pioneer's capital to $7.2 million, from $11.5 million. This would result in a regulatory capital ratio of about 1.7%.

Pioneer's president, Ed Roughton, said, "We fundamentally disagree with the conclusions reached by the examiners" relating to the need for Pioneer Savings to establish the additional reserves.

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