Bank of Granite Enforcement Action Lifted

The Federal Deposit Insurance Corp. has freed the Bank of Granite in Granite Falls, N.C., from an enforcement action.

A $55 million recapitalization from FNB United (FNBN) allowed the $682 million-asset bank to shed the cease-and-desist order it signed in August 2009. The action was lifted Feb. 27, Bank of Granite said in a Friday press release.

FNB bought Bank of Granite in October with funding from private equity firms Carlyle Group and Oak Hill Capital Partners. The $310 million that FNB raised from the firms allowed it to recapitalize both Bank of Granite and its $1.6 billion-asset CommunityOne Bank in Asheboro, N.C.. The company plans to bring Bank of Granite under the CommunityOne brand later this year.

The 2009 cease-and-desist order required the bank to remedy "unsafe and unsound" banking practices by improving board oversight and raising capital levels. The bank holds a Tier 1 leverage ratio of 8.12% and a total risk-based capital ratio of 16.29%, which exceed the ratios the FDIC's order mandates.

"Our goals since we acquired Granite and recapitalized it … have been to complete the credit clean-up, return the bank to service in its community and integrate flawlessly with" CommunityOne, Bob Reid, president of Bank of Granite and FNB, said in the press news release. "This development will allow us to complete these goals."