From the Atlanta Business Chronicle, the FDIC has issued a cease and desist order against Chestatee State Bank.  The Bank is NOT closed, but does have to address the issues raised in the Order.

The Federal Deposit Insurance Corp. disclosed Friday it issued on Aug. 19 a cease and desist order to Chestatee State Bank of Dawsonville, Ga., for alleged “unsafe and unsound banking practices” and “violations of the law.” …

Among the allegations, FDIC claims the privately held bank’s management had policies and practices that jeopardized the safety of its deposits and that its board failed to give adequate supervision and direction to the bank. FDIC claims the bank operated with inadequate equity capital and reserves, had a large volume of poor quality loans, had inadequate allowance for loan and lean losses and had hazardous loan underwriting and administration practices.

Some 16.36 percent of the bank’s total loan portfolio was in some form of delinquency or default, as of June 30, according to FDIC data. The bank made $238 million in domestic loans, as of that date. The bulk of those — $120 million — were in construction and land development.

The amount of construction and non-owner occupied loans are 500 percent larger than its total tier 1 capital of $26 million, a key regulatory metric measuring a bank’s health....It also has 90 days to come up with a written three-year business/strategic plans that addressed the overall operation of the bank.