Waterford Village Bank in Williamsville, N.Y., must increase its capital and assess its management to satisfy consent orders from the New York State Banking Department and the Federal Deposit Insurance Corp.

The $63 million-asset bank, which began operating two years ago, has been undercapitalized for the past two quarters, according to data from its call report and the FDIC.

Its Tier 1 leverage ratio fell to 2.57% at yearend, from 3.94% at the end of the third quarter, the data shows.

The regulatory orders, which took effect Feb. 12, give Waterford Village Bank 60 days to increase that ratio to at least 8%, well above the 5% level typically required for a bank to be considered well capitalized.

The state regulator disclosed the parallel consent orders from the two agencies this week, saying the bank had failed to operate in a safe and sound manner. It cited inadequate board and management oversight, among other failings.

It gave the bank 60 days to submit a three-year strategic plan addressing the deficiencies and 30 days to implement a plan to improve earnings. The bank also must give the department quarterly progress reports.

The start-up lost $2.38 million in the fourth quarter, up from a $1.75 million loss the year earlier, the data from its call report and the FDIC shows.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.