BankEast in Knoxville, Tenn., has received a prompt corrective action directive from the Federal Reserve due to its undercapitalized status.

The Fed said in a Tuesday statement that the $286.7 million-asset bank also failed to submit an "acceptable capital restoration plan." BankEast has 90 days to raise capital, sell itself, or take other actions to become "adequately capitalized."

BankEast has also been operating under a March 23, 2009, written agreement with regulators.

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