Monarch Community Bancorp Inc. of Coldwater, Mich., said that it entered into a written agreement with the Federal Reserve Bank of Chicago on Sept. 21.

The agreement requires the $263.6 million-asset company to provide quarterly updates on any improvements in its financial performance and restricts it from paying dividends, among other limitations.

The agreement was made in conjunction with a consent order entered into by the company's banking subsidiary, Monarch Community Bank, with the Federal Deposit Insurance Corp.

The bank had a total risk-based capital ratio of 8.04% as of June 30. The order requires that ratio to rise to at least 11% within 90 days of when the order was issued, on May 6.

"The bank has made significant progress in resolving the regulatory concerns; however, we have not yet achieved the capital ratios the order requires," Richard J. DeVries, the president and chief executive of the bank and its parent company, said in a release Monday. "We are pleased to provide the reporting that substantiates that progress."

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