With bad loans mounting, Freedom Bancshares Inc. in Commerce, Ga., has hired an investment banker to review its strategic options, and its bank has received a cease-and-desist order from the Georgia Department of Banking and Finance.

The parent company of the $148 million-asset Freedom Bank of Georgia disclosed the hiring and the order this month in a filing with the Securities and Exchange Commission. It did not name the investment banker.

The bank was undercapitalized as of Sept. 30, with a total risk-based capital ratio of 7.88%, according to data from the Federal Deposit Insurance Corp. It lost $3.7 million in the first nine months of the year, compared with a $437,000 profit a year earlier, and by Sept. 30 its nonperforming loan ratio had climbed to 11%, from 0.28% a year earlier.

The order, which took effect Friday, resulted from a June examination, and the bank said it has already taken steps to address the regulatory concerns.

Freedom Bank's board must establish a committee to assess the management team. The order also requires the bank to submit written plans to maintain sufficient capital, review the allowance for loan losses, strengthen loan underwriting, and boost earnings.

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