FBOP Corp. of Oak Park, Ill., which is low on capital at five of its nine banks, has a written agreement with regulators requiring it to improve quickly.
The $18 billion-asset, privately held FBOP must come up with a plan for maintaining sufficient capital at each of its banks, taking into account any supervisory requests for additional capital. It has 30 days to do so under the Aug. 28 agreement, which the Federal Reserve Bank of Chicago made public Monday.
FBOP also must reduce its concentrations of commercial real estate loans, revise how it calculates loan-loss reserves and submit a timetable for ceasing activities that are impermissible for a bank holding company. The agreement did not specify the impermissible activities.
FBOP, which operates banks in California, Illinois, Texas and Arizona, has been seeking capital for about a year. It lost nearly $1 billion in the third quarter of last year after writing off its investments in Fannie Mae and Freddie Mac, and it subsequently failed to get any help from the Treasury Department’s Troubled Asset Relief Program. Lately it also has been contending with rising loan trouble, particularly at its California and Illinois banks.