ITASCA, IL-First Chicago Bancorp, and its subsidiary, first Chicago Bank & Trust, has agreed to submit to the state and federal government requirements to cut back its commercial real estate lending, and to find ways to get bad CRE debt off the books. The company has entered into an agreement with the Federal Reserve Bank of Chicago and the Illinois Department of Financial and Professional Regulation, Illinois Division of Banking, which will require the company to submit to the two government entities plans to fix such issues as board and management oversight, credit risk management, concentration of credit, asset improvement and allowances for lease and loan losses.

For many of the issues, the bank, which reportedly has $1.2 billion in assets, has agreed in a document signed March 8 and released by the Fed today that it would submit improvement plans within the next 60 days. These plans will include, according to the document, “an acceptable written plan to strengthen the bank’s management of commercial real estate concentrations, including steps to reduce or mitigate the risk of concentrations in light of current market conditions.”The bank also agreed to submit a plan “designed to improve the bank’s position through repayment, amortization, liquidation, additional collateral, or other means on each loan, relationship or other asset in excess of $500,000, including other real estate owned that is past due as to principal or interest more than 90 days as of the date of (the) agreement, is on the bank’s problem loan list, or was adversely classified in the Report of Examination.”

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