The Office of the Comptroller of the Currency has issued an enforcement order against Citizens First National Bank that requires the Princeton, Ill., bank to become adequately capitalized or sell itself.
The prompt corrective action states that Citizens, a unit of the $1 billion-asset Princeton National Bancorp, was “critically undercapitalized,” according to a regulatory filing Monday. For the quarter that ended June 30, Citizens had a tangible equity to total assets ratio of 1.92%, the bank said. The bank lost more than $52 million last year according to Federal Deposit Insurance Corp. data.
Under the order, Citizens has to submit a capital plan to the OCC and it cannot extend credit for highly leveraged transactions, make material changes to accounting methods or pay excessive compensation or bonuses without approval from the FDIC.
Prompt corrective actions normally require banks that are critically undercapitalized to be placed into conservatorship within 90 days unless it raises sufficient capital or merges with another financial institution, the bank said.
The company said it was “diligently working to evaluate and pursue strategic alternatives.”