On September 11, the Fed announced a written agreement entered by a bank holding company and its Connecticut state-chartered bank, with the Federal Reserve Bank of New York, and the State of Connecticut Department of Banking (collectively, the supervisors) to address deficiencies identified during inspections and examinations conducted in 2023.
Among other things, the agreement required: (i) the holding company’s board of directors to fully utilize the company’s financial and managerial resources to serve as a source of strength for the bank and ensure compliance with the agreement and any other supervisory actions; (ii) the bank to submit an enhanced liquidity risk management program and a revised written contingency funding plan that included steps to diversify funding sources, enhance liquidity stress test scenarios, and address contingency and adverse scenario planning; (iii) the bank to prepare and submit a revised strategic plan and budget; and (iv) the holding company and the bank to submit a plan to maintain sufficient capital, taking into account current and future capital requirements, the adequacy of the bank’s capital, and the source and timing of additional funds. Further, effective immediately, the holding company and the bank are prohibited from declaring or paying dividends, engaging in share repurchases, or making any other capital distribution regarding common shares, preferred shares or other capital instruments without the prior written approval of the supervisors.
