On December 28, the Federal Deposit Insurance Corp. made public a "cease and desist order" that was issued against the United Bank & Trust Co., according to which, the federal regulators have cited the Versailles, Ky.-based bank for poor practices.

Owned by Farmers Capital Bank Corp., based in Frankfort, Ky., United Bank has branches across Scott, Fayette, Jessamine and Woodford counties in the state of Kentucky.

The order issued is being viewed as "unusual" by some, as it manages to give the bank executive specific deadlines as to when the facility should raise enough capital to meet the regulator's definition of "well capitalized". The executives of the bank have until December 31 to "reach a Tier 1 capital ratio of 7.5, and must have a 7.75 Tier 1 capital ratio by March 31, 2010".

By June 30, 2010, United has to reach a Tier 1 ratio of 8, and it is then required to maintain that level of funds indefinitely.

As per the FDIC, United was engaging in "unsound banking practices" like continuing with huge levels of bad assets, loans which are delinquent and non-accrual loans and getting involved in harmful lending and lax collection practices.

No comments have been shared on the development by officials from United Bank and Farmers Capital.