The news
The Federal Deposit Insurance Corp. (FDIC) has classified Old Glory Bank, an online lender in Elmore City, Oklahoma, as "significantly undercapitalized" and ordered it to file an updated capital restoration plan within two weeks, in a directive issued August 28 and made public September 25.
The FDIC said the bank's leverage ratio, which measures its highest-quality (Tier 1) capital against total assets, was 2.69% as of June 30, according to Banking Dive's account of the order. The federal minimum is 4%, American Banker noted. Banking Dive reported that the bank did not respond to regulators' notice that the directive was coming.
The order is a prompt corrective action (PCA) directive, the tool federal law gives regulators to force a fix when a bank's capital drops. Significantly undercapitalized is the fourth of five capital categories in Section 38 of the Federal Deposit Insurance Act. Only critically undercapitalized is lower, and for those banks the law requires regulators to appoint a receiver or take other documented action within 90 days.
Under the directive, Old Glory cannot accept brokered deposits, which arrive through third-party intermediaries, or employee benefit deposits until it is at least adequately capitalized, and it must restrict the rates it pays on deposits, Banking Dive reported. The bank needs prior FDIC approval to open branches, acquire companies, launch new business lines or pay senior executive bonuses, The Bank Slate reported. The bank must file monthly compliance reports, and the terms stay in force until it has been adequately capitalized on average for four consecutive quarters.
The trouble predates the directive. An FDIC consent order tied to insufficient capital has bound Old Glory since May 2024, and the bank has fallen short of the 14% Tier 1 leverage ratio that order requires, Banking Dive reported. The bank lost roughly $8 million in the first half of 2026, according to its June call report, after a 2025 loss that Banking Dive, citing call report data, put at $14.8 million; American Banker reported $13 million. Deposits still grew from $10 million in 2023 to more than $245 million at the end of 2025, American Banker reported.
A planned fix fell through. In January, the bank's holding company agreed to merge with Digital Asset Acquisition Corp., a special purpose acquisition company, to form a crypto-focused, Nasdaq-listed OGB Financial Company. The companies scrapped the plan in August after the Federal Reserve did not approve it. Mike Ring, Old Glory's president and CEO, told American Banker in an email that the bank is "currently raising the capital we need" and has so far raised $60 million.
The numbers
- Tier 1 leverage ratio, June 30, 2026 (per FDIC order, as reported)
- 2.69%
- Federal minimum leverage ratio (per American Banker)
- 4%
- Leverage ratio required by 2024 consent order
- 14%
- First-half 2026 loss (June call report)
- Roughly $8 million
- Total assets (per Banking Dive)
- $279.4 million
- Capital raised so far, per CEO Mike Ring
- $60 million
Why CEOs should care
For fintech companies, this is a reminder that a partner bank's capital position controls what the partnership can do. Under its directive, Old Glory cannot take brokered deposits, must hold down deposit rates and needs FDIC approval before launching new business lines. Any of those limits can freeze a new product or force a program to move. Ask your sponsor bank for its current capital ratios, whether it is under any enforcement order, and what your contract says if regulators restrict it.
CFOs and treasurers should treat public signals as early warnings. Old Glory had been under a capital-related consent order since May 2024, more than two years before this directive, and banks' quarterly call reports, which showed its losses, are public. FDIC insurance covers at least $250,000 at each insured bank, so balances above that at a small or thinly capitalized bank deserve a review of limits and counterparty rules.
Boards weighing deals that need regulatory approval should note how a single decision reshaped this bank's plans. Old Glory's capital fix depended on a SPAC merger that needed Federal Reserve sign-off, and when the Fed would not approve the new public company as a bank holding company, as Ring told American Banker, the capital gap remained. Contingency plans for rejected approvals belong in the deal model from the start.
The bigger picture
The FDIC's release of its August orders listed nine actions, and only one was a supervisory PCA directive. The case also shows the friction between banking and crypto ambitions: Old Glory's executives wanted the combined company to integrate crypto into daily banking, Banking Dive reported, but that route depended on a Fed approval that did not arrive.
What’s next
The key tests are whether the FDIC accepts Old Glory's updated capital restoration plan and whether new capital lifts its ratios in coming call reports. In August, a bank spokesperson told Banking Dive that Ring planned to sue the Fed over its decision, at his own expense. Any move toward critically undercapitalized status would bring the statute's 90-day receivership clock into play.
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