Cherokee Bank Enters Into Agreement With Regulator

/PRNewswire/ -- Cherokee Banking Company (OTC:CHKJ) (BULLETIN BOARD: CHKJ) , the holding company of Cherokee Bank, N.A., today announced that the bank has signed an agreement with the Comptroller of the Currency aimed at solving issues related to the downturn in the economy and housing market. The "Consent Order" primarily outlines actions to improve the bank's capitalization and credit quality.

"In response to the collapse of the housing and real estate markets, we proactively initiated our own strategic plan in June 2008 aimed at ensuring that we remain a safe and sound institution," said Dennis Burnette, president and chief executive officer. "The actions in our plan are aligned with the requirements in the Consent Order, primarily, increasing our capital ratio over and above our level at March 31, 2009, which was categorized as 'well-capitalized', as well as maintaining an adequate level of liquidity and reducing our problem assets. We plan to continue progressing along the path toward the benchmarks we have established and look forward to continuing to work closely with our regulator to do so."

One benchmark calls for the company to achieve a minimum Total Risk-Based capital ratio of 12 percent and Tier 1 capital ratio of at least 8 percent. The company already has undertaken a three-year strategic plan aimed at achieving these levels.

The agreement has no impact on deposit and retirement accounts, which continue to be insured for a minimum of $250,000 per depositor by the FDIC through December 2009. Additionally, most types of business checking accounts are insured without limit due to Cherokee Bank's participation in the FDIC's Transaction Account Guarantee Program.

"As we complete the processes outlined in the agreement, we will continue to operate as normal, providing friendly, personalized service to our clients," said Burnette.

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With the S&P 500 Having Gone Nowhere in 9 Years, CornerCap's Chief Investment Officer Offers Comments to Answer the 'What Next' Question

PRNewswire -- Some remember the 1970s when the stock market index was flat for an entire decade. Due to the OPEC oil cartel driving energy prices way up while inflation was simultaneously ratcheting up, the market went sideways.

"Now, thirty years later, we appear to have circled back for a repeat of that disappointing decade," says Thomas E. Quinn, the chief executive officer and chief investment officer of Atlanta-based CornerCap Investment Counsel, in a recently published commentary.

"Over the nine years between 1999 and 2008, a period many have referred to as the 'Lost Decade,' the S&P 500 stock index was down 6.75 percent or -0.8 percent annually and, like the 1970s, energy costs are once again skyrocketing, crowding out consumer purchases and contributing to fears of inflation," Quinn notes.

Noting that CornerCap's equity returns during this period were well over the averages of the Lost Decade, Quinn says a disciplined investment process that recognizes the booms and busts of the short-term market swings is the key to avoiding long-term pain.

"There is no magic," Quinn says. "Beating the averages over time requires a consistent philosophy and strict adherence to a buy / sell discipline which keep the probabilities in your favor."

The full text of Quinn's commentary is available online and may be downloaded at no cost from http://www.cornercap.com/library/Articles/07_15_08a.shtml .

According to Quinn, fear appears to be rampant now, with many investors selling their stock holdings. But probabilistically, Quinn says, broad selling now makes absolutely no sense.

"We can realistically observe the behavior of other investors," Quinn says. "We can objectively quantify when their behavior overpower the facts. In the long cycles, we can take advantage of those infrequent, but really extreme, investor obsessions. In the short cycles, we can continually rebalance our portfolios," he says.

"Simply stated, if we pay attention to probabilities rather than the pundits, we may lose a few small hands but we should ultimately win the game," Quinn says.