McIntosh State Bank, a subsidiary of Georgia-based McIntosh Bancshares, has reached a formal agreement with the Georgia Department of Banking & Finance and the Federal Deposit Insurance Corporation. The agreement is designed to make sure the bank is correcting identified problems in a good faith effort on the part of both the board of directors and the bank’s management team.
The basis for the regulatory order is largely due to the bank’s concentration in residential real estate acquisition, development and construction loans, coupled with the effects of the current real estate and economic downturn. It is based primarily on the bank’s numbers as opposed to any specific actions or non-actions by bank officers and employees.
Pete Malone, CEO of McIntosh State Bank, said: “We have been expecting this order and have already met many of its requirements. We will continue to operate under a business as usual environment and look forward to making additional positive progress to satisfy regulators’ directives.
“One of our biggest accomplishments in 2009 has been our ability to sell over $8.4 m of foreclosed real estate. We also have an additional $1.5m in real estate under contract. A bank’s health is indicative of the community it serves, and we believe in the ultimate health of our local economy and plan to be in position to thrive as conditions improve. The factors that made our local areas attractive for growth over the last several years continue to exist.”
According to Mr. Malone, the bank has plans to raise additional capital to meet the terms of the agreement. This is in addition to the $3m in capital injected by the bank’s directors and executive officers in December 2008. The bank’s directors and executive officers have also relinquished over $1m in retirement plan compensation as a further boost to capital.
