Oxford Bank, a subsidiary of Oxford Bank Corporation, has entered into a formal agreement with the Federal Deposit Insurance Corporation and the State of Michigan Office of Financial and Insurance Regulation.

The agreement was proposed by both regulatory agencies as a result of Oxford Bank’s most recent supervisory examination in September 2007. During the regulatory audit process, specific areas of concern were addressed by the Bank’s management team and the examiners.

The concerns are primarily related to losses in the bank’s residential mortgage loan portfolio, which have been compounded by area workforce reductions and a decline in property values; negatively impacting it’s earnings performance.

While some of these matters were already being attended to by management and the board prior to September 2007, Oxford Bank is committed to implementing the actions outlined by the Federal Deposit Insurance Corporation and Office of Financial and Insurance Regulation to further strengthen the overall management and credit administration function of the organization.

As a condition of the understanding, the bank has pledged to maintain a minimum tier-one capital adequacy ratio of 8% for the term of the agreement.