West Georgia bank given 30 days to shore up capital

The regulatory vice is tightening on a troubled small metro Atlanta lender.

The Community Bank of West Georgia in Villa Rica has been given 30 days to shore up its capital by issuing stock or taking other drastic measures, such as being acquired by another bank, or else face the possibility of being shut down by federal regulators.

The U.S. Federal Reserve issued the order, known as a “prompt corrective action,” on May 8. It was made public Thursday.

Like many small Georgia banks, Community Bank of West Georgia has suffered big losses tied to the real estate market. The bank reported an $8 million loss for 2008, with 10 percent of loans at least 90 days late.

The bank, founded in 2003, has been in the eye of regulators for some time. Federal and state regulators last September ordered the bank to improve its management and lending practices.

The Community Bank is one of 49 in Georgia with a high “Texas ratio” — a measure used to gauge a bank’s ability to absorb loan losses. A score above 100 is considered problematic. In the first quarter, The Community Bank had a ratio of 293 percent.

The bank’s president and chief executive, Rick Hayden, recently told the AJC he was “very optimistic” the bank would survive and was at “the bottom” of its problems.

The bank has two branches, in Villa Rica and Kennesaw.