After more than three years, the Federal Deposit Insurance Corp. has lifted its cease-and-desist order against Bank of Granite, its parent company announced Friday.
The Granite Falls-based bank was acquired by FNB United in 2011 as part of a recapitalization plan to save both Bank of Granite and FNB United subsidiary CommunityOne. With the new capital, FNB United has been working to reduce the percentage of troubled loans on its books.
Though the combined bank’s management has worked on cleaning up the two banks together, they file separate financial reports, have different charters and answer to different regulators.
“We are very pleased that the FDIC has determined to take this action acknowledging the progress we are making to restore the bank to financial health,” CEO Brian Simpson said in a statement.
Bank of Granite’s consent order had been issued in 2009, after the FDIC determined there was reason to believe the bank had “engaged in unsafe or unsound banking practices.” The order required, among other things, that the bank maintain higher capital levels.
CommunityOne remains under a consent order with the Office of the Comptroller of the Currency, according to the federal agency’s records. That order, too, requires higher capital levels.
FNB United is working on merging the two banks, a process that will end with the charters being combined. Simpson told the Observer that the lifting of the FDIC consent order was not required in the process but marks a milestone.