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WASHINGTON -(Dow Jones)- The U.S. Federal Reserve has determined that Pacific State Bank of Stockton, Calif. is "significantly undercapitalized" and is mandating the bank take action toward reaching financial soundness.
Within 30 days, the bank must increase its equity through contributions to surplus or by selling shares, the Fed's corrective action released Thursday said.
The central bank order also said Pacific State Bank should "enter into and close a contract to be acquired by a depository institution holding company or combine with another insured depository institution," which would be subject to regulatory approval.
Also on Thursday, the Fed issued a civil monetary penalty of $21,945 against Cecil Bank of Elkton, Maryland.
The Fed, in the order, alleged that Cecil Bank violated the National Flood Insurance Act. The bank, without admitting to any allegations, consented to the issuance of the order.
The penalty will be paid to the National Flood Insurance Program and be deposited into the National Flood Mitigation Fund.
Copyright 2009 Dow Jones Newswires
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