The Federal Reserve System has taken regulatory action against Union City Corp. in El Reno, Okla., and released a Missouri holding company and its banking unit from a written agreement.
The $352 million-asset Union City signed a written agreement with the Federal Reserve Bank of Kansas City on Aug. 30. Its board agreed to take steps to ensure that its bank, The Bank of Union, complies with a June consent order issued by the Federal Deposit Insurance Corp. and the Oklahoma State Banking Department.
The June consent order requires the bank to maintain a minimum Tier 1 leverage ratio of 8.5% and total risk-based capital of at least 12.5%. It had a Tier 1 leverage ratio of 9.4% and total risk-based capital of 13.3% as of June 30. The consent order also demands that Bank of Union submit written plans to reduce delinquent loans and troubled assets, among other requirements.
Under the terms of the written agreement with the Kansas City Fed, Union City will not pay dividends or take on new debt without regulatory approval. It must also submit quarterly progress reports that include a parent company-only balance sheet, income statement and notice of changes in stockholders' equity.
Meanwhile, the Federal Reserve Bank of St. Louis has terminated a 2009 written agreement with Midwest Independent Bancshares and its banking unit, both of which are based in Jefferson City, Mo.
The written agreement stipulated that the company and bank strengthen board oversight of management and operations, increase the number of outside directors, strengthen credit risk management, maintain sufficient capital and avoid lending to risky borrowers.
Midwest had $342 million in assets at the end of June.