The Federal Reserve Board has ordered SunSouth Bancshares of Dothan, Ala., to strengthen its board.
In a Sept. 20 written agreement, the Fed ordered the $174 million-asset company to increase the number of outside directors. The Fed also ordered SunSouth to refrain from paying dividends, redeeming stock or taking on debt without regulatory approval. The company must also issue periodic progress reports.
The Federal Deposit Insurance Corp. issued an enforcement action against SunSouth in May, requiring the company to improve its loan policies and to maintain a Tier 1 leverage ratio of at least 9% and a total risk based capital ratio of 12%.
At June 30, SunSouth's Tier 1 ratio was 7.11%; its risk-based capital ratio was 10.64%.