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): May 22, 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 1.01 ENTRY INTO A MATERIAL AGREEMENT
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Effective May 22, 2009, the Board of Directors of Greater Atlantic Bank (the
"Bank"), a wholly-owned subsidiary of Greater Atlantic Financial Corp. (the
"Company"), entered into a Stipulation and Consent to Prompt Corrective Action
Directive (the "Directive") with the Office of Thrift Supervision (the "OTS").
By execution of the Stipulation and Consent, the Bank consents to the
appointment by the OTS of a conservator or receiver or other legal custodian at
any time the Bank is significantly undercapitalized. The Stipulation and Consent
addresses the Bank's failure to operate under an accepted capital restoration
plan and imposes various corrective measures and operational limitations
mandated by statute. As of March 31, 2009, the Bank was significantly
undercapitalized for purposes of the prompt corrective action provisions of the
Federal Deposit Insurance Act. The Directive was issued when the OTS notified
the Bank that its previously filed capital restoration plan was unacceptable and
directs the Bank to be recapitalized by a merger with or being acquired by
another financial institution or other entity, or by the sale of all or
substantially all of the Bank's assets and liabilities to another financial
institution or other entity, within ten (10) days of the effective date of the
Directive pursuant to a written definitive agreement, which the Bank is required
to submit to the OTS within five (5) days of the effective date of the Directive
unless extended in writing by the OTS.
By letter dated May 22, 2009, the OTS modified the Directive to extend the five
(5) day time frame to June 15, 2009, and the ten (10) day recapitalization
deadline to July 31, 2009. The Directive also authorizes the OTS to undertake
marketing efforts to assist the Bank in its efforts to consummate a possible
recapitalization transaction.
The Directive also requires the Bank to achieve and maintain, at a minimum, the
following ratios within ten (10) days from the effective date of the Directive:
(i) Total Risk Based Capital Ratio of 8%; (ii) Tier 1 Core Risk Based Capital
Ratio of 4%; and (iii) Leverage Ratio of 4% . The Directive also outlines
guidelines for reporting to the OTS the status of capital raising efforts and
identifies mandatory operating restrictions, including those under which the
Bank has been operating since the issuance of the previously reported Cease and
Desist Order effective April 25, 2008.
The description of the Directive, the letter dated May 22, 2009, from the OTS
and the corresponding Stipulation and Consent are qualified in their entirety by
reference to their full text. Copies of the Stipulation and Consent, the letter
dated May 22, 2009, from the OTS and the Directive are attached as exhibits to
this Current Report on Form 8-K and incorporated herein in their entirety by
this reference.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
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(a) Not applicable
(b) Not applicable
(c) Not applicable
(d) Exhibit:
10.1 Stipulation and Consent to Prompt Corrective Action
Directive
10.2 Prompt Corrective Action Directive
10.3 Letter dated May 22, 2009
99.1 Press release dated May 27, 2009
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: May 27, 2009 By: /s/ Carroll E. Amos
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Carroll E. Amos
President and Chief Executive Officer
Date: May 27, 2009 By: /s/ David E. Ritter
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David E. Ritter
Senior Vice President and Chief
Financial Officer