The Federal Reserve Board said it has reached a written agreement with Cokato Bancshares Inc. of Cokato, Minn.

The $55.5 million-asset company agreed to be a source of strength for State Bank of Cokato, which has been under a consent order from the Federal Deposit Insurance Corp. since May. The Fed agreement was announced Tuesday.

Cokato Bancshares was also prohibited from paying dividends or increasing its debt without Fed approval. The company must also provide the Fed with quarterly progress reports.

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