The Office of Thrift Supervision has issued a prompt corrective action against La Jolla Bank FSB of Rancho Santa Fe, Calif., ordering the thrift to merge with another institution or sell off nearly all of its assets and liabilities to become at least "adequately capitalized."

The order, issued Feb. 16, requires the $3.8 billion-asset institution to maintain certain minimum capital levels after it returns to "adequately capitalized" status. Those include a total risk-based capital ratio of 8%, a Tier 1 core risk-based capital ratio of 8% and a leverage ratio of 4%.

On the 10th day of each month following the date of the order, La Jolla's management team must submit a report to its board on its progress in complying with the order. And on the 15th day of each month, it must submit reports documenting its progress to the OTS. La Jolla also is barred from paying bonuses or management fees, among other capital restrictions, until it is adequately capitalized.

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