The Federal Reserve on Tuesday announced a written agreement with Border Capital Group Inc. in McAllen, Texas.

Border Capital agreed to serve as a source of strength to its $171 million-asset Border Capital Bank, which has been operating under a consent order with the Office of the Comptroller of the Currency since June 23. The OCC also hit the bank with a cease-and-desist order last month due to credit and capital concerns.

The Fed barred the company from paying dividends or paying interest and principal on subordinated debt and trust preferred securities without first securing regulatory approval. The company was also required to provide a cash flow projection for 2012.

Border Capital Bank is well capitalized, though there are concerns about loan performance. At June 30, 8.1% of the bank's loans were at least 90 days past due, according to data from the Federal Deposit Insurance Corp.

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