Fulton County National Bank and Trust Co. in McConnellsburg, Pa., which reported a fourth-quarter loss of $1 million, has agreed to a regulatory order to strengthen its anti-laundering practices, review its loan portfolio, and improve its auditing.
Under the order, signed with the Office of the Comptroller of the Currency on March 24, the $142 million-asset bank said it would appoint a compliance committee to oversee adherence to the Bank Secrecy, Money Laundering Control, and USA Patriot acts.
Fulton also said it would add $250,000 to its loan-loss provision; review its commercial, commercial real estate, and agricultural loan portfolios; and hire consultants to analyze its management and board.
The order requires the 117-year-old bank, the only subsidiary of Fulton Bancshares Corp., to look into its auditor's services and improve the audit process.
Most of the fourth-quarter loss was attributed to the sale of Fulton's $11.6 million portfolio of Fannie Mae and Freddie Mac preferred stock. The company lost nearly $1.3 million on the transaction. The market value of the shares plummeted after both Fannie and Freddie reported accounting irregularities, which prompted regulators to scrutinize the investment.
Fulton reported a loss of $465,000 for all of 2004 after posting net income of $767,000 for 2003.
Its longtime chief executive, Clyde H. Bookheimer, resigned March 4. The board appointed chief financial officer David Cathell to serve as interim CEO while it conducts a search for a permanent chief.
