The Federal Reserve hit Small Business Bank with a “prompt corrective action directive” last week after determining that it was “significantly undercapitalized.”
The Lenexa, Kansas-based lender has 30 days to increase its equity through the sale of shares, to find a buyer or to take “other necessary measures” to become adequately capitalized, the Fed ordered.
This is the third time Small Business Bank has been in hot water since 2023, when the central bank cited deficiencies in the lender’s staffing, internal controls, credit risk management, lending and credit administration, capital, IT and third-party risk management…