A Fayetteville bank has entered a consent order with the Federal Deposit Insurance Corporation and the Georgia Department of Banking and Finance, all related to the ratio of capital on hand compared to the bank’s total assets and its total risk-weighted assets.
To raise the capital, State Bank of Georgia is allowed to sell common stock, sell “noncumulative perpetual preferred stock” and/or take cash contributions from the board, shareholders and/or the parent holding company, according to the order, which is dated Oct. 4, 2011.
In selling new stock, the bank must provide the purchasers with “an accurate description of the financial condition of the bank and the circumstances giving rise to the offering,” according to the order.
The bank also is required to provide notice of the consent order to its current shareholders.
The consent order noted that bank “is not admitting or denying any charges of unsafe or unsound banking practices” but instead is attempting to resolve the issue through a series of steps to increase the bank’s capital.
Included in those steps is a 90-day time frame for the bank to raise its “Tier 1” capital to equal or exceed 8 percent of its total assets, and for the bank’s “total risk-based capital” to equal or exceed 10 percent of the bank’s total risk-weighted assets.
Also the bank is agreeing to fully fund an additional “allowance for loan and lease losses” to the satisfaction of the FDIC’s Atlanta regional office and the Georgia Department of Banking and Finance.”
The order also requires the bank to formulate a contingency plan in case it is not able to meet the capital requirements of the consent order. Part of that contingency should include a plan to sell or merge the bank, according to the order.
In business for four years now, State Bank of Georgia’s office is located at 131 Gingercake Road in Fayetteville.
According to the bank’s website, the board of directors includes:
• Ali Ahmed, CEO-Flamingo Oil Co., Inc.
• Ho Lin, M. D.; Radiologist
• Nancy Bush, President of Fayette Bonding
• Satnam Sethi, President of Jackie International
• Lacy Curry, President of Curry Contracting
• Manohar Singh, Civil Engineer and Contractor
• Jim Dalton, Attorney
• Chandler Sharma, Attorney & Sr. Partner; and
• Jay Sheth, Medical Doctor
A full copy of the consent order is available at http://www.fdic.gov/bank/individual/enforcement/2011-10-02.pdf
