Thursday, May 10, 2012

Federal Reserve issues enforcement action against AB&T

The Federal Reserve disclosed Thursday an enforcement action against Gastonia-based AB&T Financial Corp., the parent company of Alliance Bank and Trust.

The written agreement with the Fed comes on top of a consent order earlier this year with the FDIC. Like the earlier order, the Fed action requires the bank to provide regular progress reports and bars the bank from issuing dividends without approval.

The Fed action also prohibits the bank from issuing new debt without approval, and reiterates the role of the bank's board in ensuring AB&T complies with the FDIC order.

The FDIC order requires AB&T to maintain higher capital levels, review its management and make a plan to resolve bad loans.

CEO Dan Ayscue said the Federal Reserve action was expected after receiving the FDIC's consent order. He said the bank has not had any issues complying with the FDIC's order and recently sent in its first progress report.

"We're making good progress on that," he said. "We feel very good about 2012."

Alliance Bank and Trust was chartered in 2004 and has four branches in Gastonia, Kings Mountain and Shelby.

It has not yet disclosed its financial results for the first quarter. In 2011, the bank lost $3.5 million, driven by loan losses.