Slavie Federal Savings Bank Takes Steps to Improve Capital Given Higher Requirements

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SFSB, Inc., today announces that its wholly-owned subsidiary, Slavie Federal Savings Bank, voluntarily entered into a formal written agreement with the Office of the Comptroller of the Currency (OCC). The bank agreed to take steps to improve asset quality, credit risk exposure, strategic planning initiatives, capital planning, and risk management.

SFSB, Inc., today announces that its wholly-owned subsidiary, Slavie Federal Savings Bank, voluntarily entered into a formal written agreement with the Office of the Comptroller of the Currency (OCC), dated July 17, 2012, pursuant to which the bank agreed to take steps to improve asset quality, credit risk exposure, strategic planning initiatives, capital planning, and risk management.

The Board of Directors and Senior Management have aggressively worked to address the concerns of the OCC and have developed formal action plans to comply with the requirements of the agreement and the OCC concerns that gave rise to the agreement.

In connection with the current economic environment and to meet the agreed-upon individual minimum capital requirements that become effective September 30, 2012, the bank is revising its three-year formal Capital Plan to reach and maintain its Tier 1 capital to total assets at 9% or above and its total capital to risk-weighted assets at 14% or above. As of June 30, 2012, the Bank had Tier 1 capital of 6.48% and total risk-based capital of 12.45%. The bank’s liquidity remains robust, with approximately $40 million in liquid funds. Slavie’s Allowance for Loan Losses has been increased to approximately 4.63% of total loans as of June 30, 2012, to cover anticipated losses in the portfolio as of that date.

Philip E. Logan, President and CEO of SFSB stated, “Nothing about today’s banking environment resembles prior downturns. These clearly continue to be unprecedented times for our local markets and our bank. Slavie Federal Savings Bank, like many other institutions, has not been immune to the unparalleled challenges facing the economy and real estate markets. We will continue working in close consultation with our regulators and executing our strategic plan to help ensure the long-term strength and performance of the bank.”

Logan continued, “The agreement does not affect the bank’s ability to continue to conduct its banking business with customers in a normal manner. Banking products and services, hours of business, Internet banking, ATM usage, and FDIC deposit insurance coverage will all be unaffected. Customer deposits remain protected and insured by the FDIC up to $250,000 per depositor, the maximum allowed by law. Additionally, as part of the Dodd-Frank Act, unlimited FDIC insurance coverage applies to non-interest-bearing deposit accounts through December 31, 2012.

SFSB, Inc., headquartered in Bel Air, Maryland is the holding company of Slavie Federal Savings Bank. Founded in 1900, the bank is federally chartered and FDIC-insured serving Harford County and the Baltimore Metropolitan area. The bank offers a wide variety of financial services and products. For more information, visit http://www.slavie.com.

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Cobey Dietrich
A. Bright Idea Public Relations and Advertising
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