GENEVA – Another local bank has joined the ranks of those ordered by government regulators to raise more money.
On Monday, First Choice Bank said it has entered into a consent order with the Illinois Department of Financial and Professional Regulation and the Federal Deposit Insurance Corporation.
Under the terms of the order, dated June 30, First Choice Bank has 90 days to raise enough capital to increase its level of so-called risk based capital to about 11.5 percent of its average total assets.
That means the bank must raise about $11 million of capital, said First Choice Bank President Jim Valete.
The order does not stipulate what would happen to the bank if it does not meet the goals outlined in the agreement.
But Valete said he and others in management at the Geneva-based bank are not worried, as they are nearing completion of three separate deals that will allow the bank to file the documentation required to satisfy the desires of regulators by as soon as the end of August.
Valete said First Choice has three letters of intent from three separate investment groups willing to commit the cash needed to keep the bank "open, independent and strong."
The largest of the three groups is populated by a group of current First Choice shareholders who have committed $7 million to First Choice's capital drive.
Valete would not identify the other two investment groups, but described them as "joint venture partners" who will invest in the bank's real estate assets.
Valete said First Choice has known for some time that regulators would take action and that the bank has been "pretty aggressive" in seeking out the capital it needs to hold off any further regulatory actions.
"And that's why we already have the capital we need accounted for and raised," Valete said.
Other local banks working under orders from bank regulators to raise capital include Aurora-based Old Second Bank and St. Charles-based Valley Community Bank.
