Regulators have taken action against Port Byron State Bank in Illinois.

The Federal Reserve Bank of Chicago entered a written agreement with the $87 million-asset lender on July 23, Fed officials said Tuesday. The agreement requires the bank to strengthen board oversight of its operations, improve its asset quality and produce plans to improve lending and credit-risk management. The order also forbids the bank from paying dividends without the regulator’s approval.

Port Byron, the banking unit of First Port Byron Bancorp, had a Tier 1 leverage ratio of 8.19% and total risk-based capital of 16.12% as of the end of the second quarter, according to the Federal Deposit Insurance Corp.

The bank has three branches in western Illinois.

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