Most local banks owned by $2.93 billion-asset Metropolitan Bank Group Inc., a Chicago-based lender owned by animal adoption advocates Peter and Paula Fasseas, have been ordered by state and federal banking regulators to shape up.
The individual banks facing orders include: North Community Bank of Chicago, with $447.5 million in assets; First Commercial Bank of Chicago, with $234.7 million in assets; Citizens Community Bank of Berwyn, with $183.2 million in assets; Archer Bank of Chicago, with $540.5 million in assets; Community Bank of DuPage in Downers Grove, with $44.6 million in assets; Metropolitan Bank & Trust Co. of Chicago, with $290.1 million in assets; and Chicago Community Bank, with $252.1 million in assets; and Plaza Bank, a Norridge-based bank with $374.1 million in assets. A ninth Fasseas-run bank, Edens Bank, which has $258.6 million in assets and is based in Wilmette, has also been hit with a consent order.
The Federal Deposit Insurance Corp. and the Illinois Department of Financial and Professional regulation have ordered the various individual banks to, among other things, maintain certain capital levels, restrict dividends, limit growth and hire a third-party to conduct a management study.
As of Sept. 30, the latest period for which numbers are available, the nine banks’ total capital exceeded the levels required by regulators. The orders were signed Jan. 13 and made public Wednesday.
The bank holding company has stopped paying dividends to the Treasury Department under the bank bailout, called the Troubled Asset Relief Program. It has also been combining its bank charters to reduce costs.
“As is the case with many community banks, the recession affected the ability of some of our customers to make loan payments on a timely basis,” Metropolitan Chief Executive Peter Fasseas said in a statement. “We continue to work diligently with our customers, and we are making progress as the local economy improves.”
He said Metropolitan expects to see even better results by merging some of its banks, “which will consolidate our resources and simplify our management.”
“We have already proactively addressed the issues raised in the consent order agreements,” he said. Fasseas said that each of Metropolitan’s banks are above the capital levels that regulators set.
Fasseas stressed that the agreements order the banks to “maintain” certain capital levels, which he says compare favorably with those of other banks in the Chicago area.
“In addition, our banks are supported by a central holding company, Metropolitan Bank Group, which is financially healthy with strong capital reserves,” Fasseas said. “We are confident that our strong capital, combined with our continuing strong core earnings, will enable us to withstand the after-effects of a very severe recession and continue to play an active role in our community.”