The Federal Reserve Board on Monday issued enforcement actions against two community banks in New York.
According to separate agreements, the $2.4 billion-asset Smithtown Bancorp Inc. and the $393 million-asset BNB Financial Services Corp. will no longer be able to declare or pay dividends without prior approval from the Federal Reserve Bank of New York.
Both banks will also not be allowed to make any distributions of interest, principle or other amounts of subordinated debt or trust-preferred securities without approval from the New York Fed.
Within 60 days, Smithtown and BNB will be required to submit a statement of planned sources and uses of cash for debt service and operating expenses for the remainder of the year, according to the agreements.
