FDIC caps Old Glory Bank's growth after its leverage ratio falls to 2.69%

Old Glory's leverage ratio fell from both ends. Deposits went from $10 million in 2023 to more than $245 million at the end of 2025 ^[4], about 24 times as much ^[1]. A deposit is a liability, and it funds an asset, and the Tier 1 ratio divides capital by assets. Capital shrank. The bank lost $13 million last year and nearly $8 million in the first six months of this year ^[5], about $21 million in eighteen months ^[8]. Its high-visibility marketing brought in depositors ^[14]. According to American Banker, it has been unable to attract equity funding ^[6].

In dollars the hole is small. I took the $277 million of assets ^[7] as the denominator. The ratio is actually computed on average assets, so these figures are approximate. A 2.69% ratio at June 30 ^[2] implies about $7.5 million of Tier 1 capital ^[2]. Reaching the 4% minimum takes about $11.1 million, a gap near $3.6 million ^[3]. Below 2% the bank would be "critically undercapitalized," and a receiver or conservator could be appointed within 90 days ^[3]. The distance down to that line is about $1.9 million ^[4].

The rate of loss is the harder number. First-half losses averaged about $1.3 million a month, up from about $1.1 million a month last year ^[5]. At the first-half pace, the $1.9 million cushion covers roughly six weeks from the June 30 measurement ^[6].

The directive closes the routes a growing bank would take. Old Glory cannot open branches, buy companies, launch new business lines or lift its average total assets from one quarter to the next without approval ^[9]. It cannot accept or renew brokered deposits. Senior executives get no bonuses, and pay is capped at pre-undercapitalization averages ^[11]. The plans for digital payment ecosystems and cryptocurrency integration ^[14] are the kind of new business line the order bars. The ratio can now improve only through new capital, through profits the bank has struggled to produce ^[6], or through a smaller balance sheet.

Regulators can now require one of three outcomes: a capital raise, an acquisition by another institution, or liquidation ^[7]. The order stays in force until the bank is adequately capitalized for four consecutive quarters ^[10]. Suppose losses hold at the first-half pace and assets stay flat. Staying at 4% for a year would then take the $3.6 million gap plus about $16 million of losses, or close to $20 million of new equity ^[7], from a bank that has attracted none ^[6]. I think a sale is the likelier outcome, or rather the likelier one that keeps the doors open. A buyer would get the deposit base and a charter that traces back to First State Bank, founded in 1903, whose former owner Clay Christensen sits on the board ^[13]. The counter-case is that $3.6 million is a modest check for a founding group that includes Ben Carson, Mary Fallin Christensen, Larry Elder and John Rich ^[12]. A check of that size would close the June gap and leave the $1.3 million a month of losses untouched ^[5].

A capital plan the FDIC accepts, with an investor named in it, would prove the sale-or-receivership view wrong. Management did not file one by the Aug. 28 deadline, and executives did not respond within the required two weeks ^[8]. Mike Ring, the president and chief executive, did not respond to American Banker's requests for comment ^[15].