Community Bank and Trust has received a cease-and-desist order from the Federal Deposit Insurance Corporation for what the FDIC describes as unsafe business practices.

The FDIC had instructed Community Bank and Trust to raise additional capital and reclassify bad loans and to restructure its board operations and alter its management practices during its probationary period.

Operating with less than satisfactory management and board of directors’ oversight, operating with inadequate equity capital and reserves, operating with a large volume of poor-quality loans and operating with an inadequate allowance for loan and lease losses were cited as unsafe practices.

Community Bank and Trust has more than 50 bank branches in Barrow, Jackson, Banks, Clarke, Oconee, Habersham, Hall, White, Rabun and Stephens counties in Northeast Georgia. In addition, the bank has locations in , Towns, Troup, and Muscogee counties in Georgia and branches in Alabama.

"I think the downturn in the economy has affected every bank’s loan portfolio," said Community Bank and Trust President Charles Miller. "We have had loan losses, but remember we’re a 100-year-old institution. We’re geographically diverse and we have a billion dollars in deposits."

Fourteen banks in Georgia have failed during this financial crisis. And more are likely on the horizon in spite of federal stimulus dollars going to financial institutions, indicates Barrow County Commission Chairman Danny Yearwood, who was among the 100 officials meeting with Federal Reserve Bank officials this week.

"I told them you’ve got to be more honest than this," said Yearwood, who challenged the 2 percent inflation rate being touted for next year. "They know we are in trouble and may be looking at double-digit inflation." Even with the financial bailouts, "they are going to let some banks go under."

Other problems identified by the FDIC included lax underwriting and weak loan administration.

"We haven’t tightened up (our lending practices) that much," Miller said. "We are doing things differently. There’s not that much loan demand right now. We think we had the right committees, the right loan structure in place. It’s just that some markets have been hit really hard, particularly acquisition and development loans. However, every bank is experiencing the same thing.

"We all need to be conscious of capital and we are in the process of raising capital. Our loan loss reserve is stronger than it has ever been," Miller said.

"The board has taken an active role in this along with management. We’re cooperating in every way we can. We have appointed a committee to make sure we’re doing what we agreed to do," Miller said.

Miller assures that all customer accounts are safe.

"Everyone’s deposits are insured for $250,000 and IRAs are insured for an additional $250,000. Since we’re a multi-bank holding company, we can insure families up to a million dollars or more," Miller said.

The FDIC had ordered a complete internal audit be submitted for review, with quarterly progress reports also being made.