Three Milwaukee-area banks have received compliance orders from the Federal Reserve Bank of Chicago in recent weeks, ordering them to raise capital and improve their financial performance.
Brookfield-based Ridgestone Bank was the most recent of the banks to receive instructions from the Federal Reserve Bank. It has been ordered to create a plan to raise funds and increase its capital ratio, and to submit a written plan for its planned sources and uses of cash for debt service.
Kenosha-based Southport Financial Corp., the corporate parent of Southport Bank, and Milwaukee-based Legacy Bank have also received notices in recent weeks.
Both Ridgestone bank and Southport Financial have been directed to not pay or declare any dividends or reduce the bank’s capital in any way without approval from the Federal Reserve Bank of Chicago.
Legacy Bank has been ordered to raise capital and begin talks with other area banks about potential mergers or acquisitions. It has also been ordered to not make any capital distributions or pay dividends, per the letter from federal regulators. It is also forbidden from making new deposits or renewing deposits that have interest rates higher than prevailing effective rates on similar amounts.
