Aug. 13--PANAMA CITY, Fla. -- BONIFAY -- The Bank of Bonifay will be healthy by Sept. 30, bank officials said Wednesday. The bank failed to meet federal standards during the second quarter, meaning the bank is inadequately capitalized.

The Bank of Bonifay's total risk-based capital ratio fell to 7.32 percent, according to a recent performance report to the Federal Deposit Insurance Corporation (FDIC). The FDIC requires an 8 percent rating for a bank to be adequately funded, or capitalized. Banks below that threshold are more likely to fail, said David Barr, an FDIC spokesman.

Senior Vice President Sandy Spear said the bank will meet federal standards on or before Sept. 30, the end of the third quarter.

"We'll be well-capitalized in all areas," Spear said. "We are very confident."

The deadline is self-imposed, Spear said. She said she could not elaborate on any specific proposal, but the bank is working with partners. Bank officials have legal concerns about revealing information.

Spear said in an e-mail the bank's accounts are protected up to $250,000 or more, depending on how the accounts are structured.

This is the second time in three years The Bank of Bonifay has fallen below federal or state standards.

In 2007, the bank hit 7.03 percent in its risk-based capital ratio and saw a turnover of its president and board chairman. Bank officials tried to correct the bank's problems with negotiations to sell the bank to Protective Life Corp., an insurance company, last November, but the deal fell through in April.

The bank was handed a ceaseand-desist order this past March.

The FDIC will not comment on any specific action involving the bank, but automatic restrictions apply. Those include requiring the bank to submit a Capital Registration Plan and restrictions on asset growth and of opening branches without approval, Barr said.

Having a bank fall below an 8-percent capital ratio is unusual, Barr said. The vast majority of banks are well capitalized, he said. The Bank of Bonifay is the only area bank listed as undercapitalized on Thestreet.com , a Web site dedicated to following the financial market. The FDIC has a list of banks it is watching, but the list is not publicly available, Barr said.

While the postings for all area banks are not yet available, none of those posted fell below the riskbased capital ratio of 8 percent. The Bank of Bonifay reported a negative net income of $3.45 million. As of the end of June, the bank held $3.3 million in past-due loans, or loans unlikely to be repaid. The bank held about $2.5 million in total assets.

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