Highland Community Bank, one of three African-American-owned banks in Chicago, has been hit with a regulatory order that will require it to raise nearly $2 million in new capital and perhaps more, depending on how the bank’s third-quarter results reflect a recent regulatory exam.Located on West 87th Street a block or two past Ashland. This article notes that takeover rumors have been out for most of this decade for Highland. In fact Seaway Bank was angling to buy the bank but the deal was never done.
The Federal Deposit Insurance Corp. and Illinois Division of Banking entered the “cease and desist” order on Sept. 15 against Highland, which has $119 million in assets and three South Side branches. The regulators accused the bank of improper lending activities, including not obtaining adequate collateral from borrowers, not establishing and enforcing loan repayment programs and operating with too many poor-performing loans.
As of June 30, Highland’s capital levels were within bank regulatory guidelines for being considered “well-capitalized.” But the regulators in the order demanded that Highland’s capital be at an even higher level, requiring its highest-quality capital to be increased from $10 million to nearly $12 million.
The order requires the bank to bolster its reserves for losses from bad loans and identify problem loans on its books that regulators found in their examination of Highland, dated Aug. 4. The bank’s most recent financial results, for the period ended June 30, included a fairly modest amount of delinquent loans, but that report likely won’t have reflected the regulators’ Aug. 4 exam.
Monday, September 28, 2009
Highland bank slapped over loan woes
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