Cecil Bancorp Inc. in Maryland and its subsidiary Cecil Bank Friday agreed not to declare or pay any dividends without the prior consent of federal and state regulators.
The bank also agreed to strengthen the board's control over its management and operations. The company, based in Elkton, has $513 million of assets.
Under the agreement, Cecil Bank will need the prior approval of the Federal Reserve Bank of Richmond, the Federal Reserve Board Division of Banking Supervision director and the State of Maryland Commissioner of Financial Regulation to pay dividends or to reduce its capital in any way, among other things.
In addition, Cecil Bank's board agreed to submit over the next two to three months numerous written plans to the reserve bank and the commissioner.
The plans will address the board's strategy for improving the bank's condition, its audit functions and its risk, particularly in connection to concentrations of commercial real estate loans.
One report will explain the bank's plan for repaying, liquidating or otherwise reducing its risk on assets above $250,000 that it holds. The board also agreed to develop a management succession plan and, within 30 days, to retain a consultant to review the bank's corporate governance and make suggestions.