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A Georgia community bank that Processing Content<\/p>\n Community Bankshares in LaGrange, Ga., agreed to a cease-and-desist order with the Federal Reserve. The action, announced Thursday, requires the $288 million-asset company to improve board oversight, strengthen its senior management ranks and consider a capital raise.<\/p>\n The cease-and-desist order bars Community from paying dividends, repurchasing shares or engaging in any other capital distributions.<\/p>\n Jeremy Gilpin, who serves as chairman of Community Bankshares and CEO of its bank subsidiary, Community Bank & Trust \u2014 West Georgia, did not respond to a reporter’s request for comment by deadline.<\/p>\n Community announced its government-guaranteed-lending initiative in January 2025. It did so despite experiencing high levels of nonperforming loans throughout 2024, according to Federal Deposit Insurance Corp. data.<\/p>\n The delinquency trend continued into 2025. Indeed, at year end, Community Bank & Trust reported a ratio of noncurrent loans to loans of 10.15% \u2014 significantly higher than the industry-wide average of 1.56%.<\/p>\n Community Bankshares and its banking subsidiary had been involved in Small Business Administration and United States Department of Agriculture lending prior to 2025, when they expanded those business lines.<\/p>\n As part of the expansion, the company unveiled a new subsidiary, Phoenix Lender Services. The plan was for Phoenix, which continues to operate, to act as a full-spectrum provider for Community Bank & Trust and other Main Street lenders. It would originate, service and sell both SBA and USDA loans.<\/p>\n Phoenix was able to generate significant loan volume. It reported that it aided in the origination of $325 million in SBA and USDA loans during the government’s 2025 fiscal year, which closed Oct. 1.\u00a0<\/p>\n Gilpin said in a November 2025 press release that the unit was targeting combined originations of $300 million in fiscal 2026. During that time, Community Bank & Trust grew rapidly, from $216.6 million of assets at the end of 2024 to $288.2 million on Dec. 31, 2025.<\/p>\n According to SBA statistics, Community Bank & Trust has originated 7(a) loans totaling $122.5 million so far in fiscal 2026. Under both 7(a) and the USDA, the government guarantees loans originated by private lenders.\u00a0<\/p>\n Community had tapped Chris Hurn, a longtime SBA lender, to serve as president and CEO of Phoenix as well as Community Bankshares.<\/p>\n However, Hurn left the company in October and later filed suit a month in U.S. District Court for the Northwest District of Georgia. In court filings, Hurn claimed he agreed to join the company and invested $2 million, only to be terminated after a dispute over compensation.<\/p>\n Hurn is suing Community Bankshares for the return of his $2 million investment as well as other money he said the company owes him. Hurn declined to comment, citing the ongoing litigation.\u00a0\u00a0\u00a0\u00a0<\/p>\n The Community Bankshares cease-and-desist order is the first to be issued by the Federal Reserve Board in 2026. It followed an examination that the Federal Reserve Bank of Atlanta completed in January.<\/p>\n Community Bank & Trust was profitable in 2025, reporting full-year net income totaling $4.5 million, but a key capital ratio has been falling.<\/p>\n The bank reported a Common Equity Tier 1 capital ratio of 8.41% as of Dec. 31, comfortably above the 4.5% regulatory minimum but down from the 9.45% ratio reported at the end of 2024, according to FDIC statistics.<\/p>\n<\/div>\n