Shares of Cape Fear Bank Corp. lost half of their value Thursday, after the $473 million-asset Wilmington, N.C., company said that regulators ordered it to maintain higher capital levels.

A cease-and-desist order from the Federal Deposit Insurance Corp. and the North Carolina Commissioner of Banks gives its Cape Fear Bank 120 days to boost its Tier 1 leverage ratio to 6% and its total risk-based capital ratio to 10%, the company said in a Securities and Exchange Commission filing Thursday.

The bank had a Tier 1 leverage ratio of 5.66% and a total risk-based capital ratio of 8.01% at yearend, according to data from the FDIC. (Generally a Tier 1 leverage ratio of 5% and a total risk-based capital ratio of 10% is the minimum needed to be considered well capitalized.)

The order, which the bank signed Tuesday, stems from a regulatory exam the FDIC conducted in October.

Besides boosting capital, the bank must improve board and management oversight, a process it has already begun, according to the filing.

Ralph N. Strayhorn, who has more than 25 years of banking experience, became the president and chief executive officer of the company and the bank in November. He also joined the board for the company and the bank, bringing the number of new directors to five, the filing said.

The company said it also signed a written agreement Tuesday with the Federal Reserve Bank of Richmond. The agreement restricts it from paying dividends, incurring debt or redeeming stock.

News of the regulatory actions sent the company's stock tumbling Thursday, to 33 cents a share. The stock had been trading above $1 before last week.

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