Savannah Bancorp Inc. in Georgia said earlier this week that its bank had entered into a written agreement with the Office of the Comptroller of the Currency that reflects an "elevated level" of classified assets.
The $1 billion-asset company said in a
The company said that its board and management have already developed formal action plans to comply with the requirements of the agreement, adding that the bank remains well capitalized with a Tier 1 capital ratio of 8.71% at June 30.
The agreement requires the bank to develop a written program to eliminate the "basis of criticism" for each of its criticized assets while limiting the extension of credit to borrowers whose loans or other extensions of credit are criticized. The company must also develop and implement a three-year plan covering the bank's overall risk profile, earnings, performance growth, balance sheet mix, and off-balance sheet activities, among other things. Regulatory approval will also be required before the company can accept or renew most brokered deposits exceeding $35 million.
"We have a good and open rapport with our regulators," John Helmken 2d, the company's president and chief executive, said in press release. "We felt that the … bank's continued profitability, strong capital ratios and conservative level of provisioning for loan losses through the building of our allowance would provide the regulatory buffer that we needed to prevent any formal regulatory actions. However, this agreement is centered primarily around the elevated level of classified assets — many of which are loans that continue to pay and perform as agreed."
Classified assets have been a
