By Becky Yerak |
Federal and state banking regulators are ordering Buffalo Grove-based
American Enterprise Bank to raise at least $6 million in additional
capital, to hire a consult to assess its management, and to add two
independent directors to its board, among other things.

The consent order between the $350.3 million-asset bank, the Federal
Deposit Insurance Corp., and the Illinois Department of Financial and
Professional Regulation was issued Feb. 24 and released Friday.

The bank also must not pay any dividends without regulatory approval.

American Enterprise couldn’t be reached for immediate comment.

Last week, the Tribune reported that American Enterprise was one of 32 Chicago-area banks with Texas ratios of at least 100 as of yearend.

A Texas ratio tallies up a bank’s severely past-due loans and foreclosed real estate and then compares them with the levels of a bank’s core capital, typically shareholders’ equity, and the money set aside for potential loan losses. When the result exceeds 100, the bank is in serious trouble and needs to take action.

American Enterprise’s Texas ratio was 102. Local banks had ratios as high as 535 percent.

The bank, which opened in 1995, must also investigate its gas station and convenience store loan portfolio and stop making loans to financially troubled borrowers.

It lost $25.3 million in 2009, compared with a loss of $452,000 in 2008, and 13.1 percent of its loans are seriously delinquent. That’s up from 4.1 percent at the end of 2008.

To read a copy of the entire order, click here.