UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): February 10, 2009
GREATER ATLANTIC FINANCIAL CORP.
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(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
0-26467 54-1873112
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(Commission File Number) (IRS Employer
Identification
Number)
10700 Parkridge Boulevard, Suite P50 Reston, Virginia 20191
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(Address of Principal Executive Offices) (Zip Code)
(703) 391-1300
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(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 8.01 OTHER EVENTS.
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On February 10, 2009, Greater Atlantic Bank (the "Bank"), the
wholly-owned subsidiary of Greater Atlantic Financial Corp. (the "Company"),
received written notification (the "Notice") from the Office of Thrift
Supervision (the "OTS") that the Bank is deemed to have notice as of January 30,
2009, that the Bank is "undercapitalized" under Part 565 of the OTS Rules and
Regulations based on the regulatory capital ratios the Bank reported in its
Thrift Financial Report for the period ended December 31, 2008. Accordingly, the
Bank is now subject to the restrictions on asset growth, dividends, other
capital distributions and management fees set forth in Section 38(d) of the
Federal Deposit Insurance Act (the "FDIA") and Section 565.6 of the OTS Rules
and Regulations.
The Notice also requires the Bank to file a written capital restoration
plan, including all of the required information set forth in Section 38(e)(2)(B)
of the FDIA, with the Regional Director of the OTS in Atlanta, Georgia, with
copies to the FDIC Regional Director, no later than March 16, 2009.
The Notice specifically provides that the FDIA supplements but does not
replace the existing supervisory and enforcement authority of the OTS to deal
with capital deficiencies and other supervisory problems. Accordingly, the
previously disclosed Cease and Desist Order that the Bank entered into with the
OTS on April 25, 2008, as amended, remains in effect. In addition, the Notice
states that the OTS retains the ability to impose additional restrictions under
its Prompt Corrective Action (the "PCA") authority and that the Bank should
expect that the OTS will probably issue a PCA Directive in the near future. The
Bank is also required to monitor its compliance with the requirements of Section
38(e) of the FDIA and applicable regulations and to notify the OTS at least 30
days prior to adding a director or hiring a senior executive officer, changing
the responsibilities of a senior executive officer or engaging in any
transactions with affiliates.
As an undercapitalized institution, the Bank may not: (1) make or pay
any capital distributions without the prior approval of the OTS; (2) pay any
management fees to any person having control of the Bank or (3) accept, renew or
roll over any brokered deposit. Further, unless the OTS has accepted the Bank's
capital restoration plan, the Bank may not permit its total average assets
during any calendar quarter to exceed its total average assets during the
preceding calendar quarter unless the increase in assets is consistent with the
capital restoration plan and the Bank increases its ratio of tangible equity in
the quarter at a rate sufficient to enable the Bank to become adequately
capitalized in a reasonable amount of time.
In addition, the Bank may not acquire any interest in any company or
insured depository institution, acquire any additional branch office, or engage
in a new line of business unless: (1) the OTS has accepted the Bank's capital
restoration plan, the Bank is in compliance with the plan and the OTS determines
that the action is consistent with and will further achievement of the plan, or
(2) the Board of Directors of the FDIC approves the action.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GREATER ATLANTIC FINANCIAL CORP.
Date: February 17, 2009 By: /s/ Carroll E. Amos
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Carroll E. Amos
President and Chief Executive Officer
Date: February 17, 2009 By: /s/ David E. Ritter
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David E. Ritter
Senior Vice President and Chief
Financial Officer