The Bank Slate


Cecil in Maryland freed from 2010 written agreement

The Federal Reserve has terminated a 12-year-old written agreement against Cecil Bancorp in Elkton, Md.

The $242.5 million-asset Cecil had been operating under the agreement since June 2010. Among other things, it instructed the company to submit a written plan to improve oversight, hire a consultant to conduct a corporate governance review and strengthen its credit risk practices.

The company was also required to reduce its concentration of commercial real estate loans and enhance its loan review processes.

The termination “is a fitting end to 2022 for Cecil Bank,” William Cole, the company’s chairman, said in the release.

“This positive action by the banking regulators is further confirmation that our management team’s derisking of the institution and execution of the strategic plan is yielding the desired results,” Cole added. “In 2022, we returned the bank to operational profitability for the first time since 2009.”

Cecil was placed under a prompt corrective action in August 2015 that ordered it to raise more capital or sell itself. That order required Cecil to increase its equity and banned the company from accepting new deposits, or renewing time deposits at a rate above prevailing rates, without prior regulatory approval.

A group led by Hovde Group invested $30.2 million in Cecil in October 2017. The Fed released the company from the PCA in two months later. The company raised another $10 million in 2021.

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