Ontario Bancorporation Enters Written Agreement With Chicago Fed

The Federal Reserve Board announced on October 2, 2026, the execution of a Written Agreement, dated September 24, 2026, between Ontario Bancorporation, Inc., of Ontario, Wisconsin, and the Federal Reserve Bank of Chicago. The agreement immediately requires prior regulatory approval for dividends, share repurchases, and other capital distributions, and gives the holding company 60 days to submit an acceptable capital plan. The agreement carries Docket No. 26-051-WA/RB-HC, and the Board designated its announcement for release at 11:00 a.m. EDT.

Ontario is a registered bank holding company that owns and controls Bank of Ontario, a state-chartered nonmember bank located in Ontario, Wisconsin, that is regulated by the Federal Deposit Insurance Corporation and the Wisconsin Department of Financial Institutions. The Board of Governors of the Federal Reserve System is Ontario’s appropriate federal supervisor.

The agreement states that the most recent offsite review of Ontario conducted by the Federal Reserve Bank of Chicago identified certain deficiencies at the holding company. It also states that on August 6, 2026, the FDIC and the Wisconsin Department of Financial Institutions entered into a Consent Order with Bank of Ontario to address unsafe or unsound practices, including those related to asset quality, capital, earnings, and liquidity. The recitals describe a common goal of maintaining Ontario’s financial soundness so that it can serve as a source of strength to the bank, and state that Ontario’s board of directors authorized the company to enter into the agreement and consented to compliance with each of its provisions.

Under the agreement, Ontario’s board of directors must take appropriate steps to fully utilize its financial and managerial resources, pursuant to section 38A of the Federal Deposit Insurance Act (12 U.S.C. § 1831o-1) and section 225.4(a) of the Board’s Regulation Y (12 C.F.R. § 225.4(a)), to serve as a source of financial and managerial strength to Bank of Ontario. That obligation includes demonstrating the ability to provide financial assistance to the bank, for example by raising additional capital or taking other steps to improve its financial condition in the event of financial distress, and taking steps to ensure that the bank complies with the Consent Order and any other supervisory action taken by its federal or state regulators.

Capital Plan and Cash Flow Projections

Within 60 days of the agreement’s effective date, Ontario must submit a written capital plan acceptable to the Reserve Bank to maintain sufficient capital on a consolidated basis and to provide financial assistance to Bank of Ontario. The plan must include four items: an assessment of the adequacy of the bank’s capital that considers current and anticipated sources of capital; an analysis of that adequacy taking into account the volume of adversely classified credits, the adequacy of the allowance for credit losses, current and projected asset growth, projected earnings, and the bank’s risk profile; an action plan to raise additional capital or otherwise improve the bank’s financial condition, which may include contributing assets to the bank up to the amount of Ontario’s capital; and an enhanced capital contingency plan that fully addresses both Ontario’s and the bank’s short-term and long-term capital needs.

Within 30 days of the effective date, Ontario must submit a written statement of its planned sources and uses of cash for debt service, operating expenses, and other purposes covering the remainder of 2026. A Cash Flow Projection for each calendar year after 2026 is due to the Reserve Bank at least one month before that year begins.

Dividend, Debt, and Governance Restrictions

Effective immediately, Ontario may not, directly or indirectly, declare or pay dividends, engage in share repurchases, or make any other capital distribution in respect of common shares, preferred shares, or other capital instruments, including interest payments due on subordinated debentures, without the prior written approval of the Reserve Bank and the Director of Supervision and Regulation of the Board of Governors. Approval requests must be received in writing at least 30 days before the earlier of the proposed declaration, payment, or distribution date or the required notice of deferral, and must contain current and projected information on Ontario’s and the bank’s capital, earnings, and cash flow, the bank’s asset quality and allowance for credit losses, and identification of the funding sources for the proposed payment.

Ontario also may not, directly or indirectly, incur, increase, prepay, or guarantee any debt without the prior written approval of the Reserve Bank and the Director. Those requests must be received at least 30 days before the proposed transaction date and must include a statement of the purpose and terms of the debt, the planned sources of repayment, and an analysis of the cash flow resources available to meet that repayment.

When appointing any new director or senior executive officer, or changing the responsibilities of a senior executive officer so that the officer would assume a different senior executive officer position, Ontario must comply with the notice provisions of section 32 of the FDI Act (12 U.S.C. § 1831i) and Subpart H of Regulation Y (12 C.F.R. §§ 225.71 et seq.). The company must also comply with the restrictions on indemnification and severance payments contained in section 18(k) of the FDI Act (12 U.S.C. § 1828(k)) and Part 359 of the FDIC’s regulations (12 C.F.R. Part 359).

Within 30 days after the end of each calendar quarter, Ontario’s board must submit written progress reports to the Reserve Bank detailing the form and manner of all actions taken to secure compliance with the agreement and the results of those actions. Each plan or statement submitted under the agreement must contain a timeline for full implementation with specific deadlines for each component. Within 10 days of Reserve Bank approval of the capital plan, Ontario must adopt the approved plan and promptly implement it, and during the term of the agreement the plan may not be amended or rescinded without the Reserve Bank’s prior written approval. The Reserve Bank may, in its sole discretion, grant written extensions of time for compliance with any provision.

The agreement binds Ontario and its institution-affiliated parties, as defined in sections 3(u) and 8(b)(3) of the FDI Act (12 U.S.C. §§ 1813(u) and 1818(b)(3)), and their successors and assigns. Each provision remains effective until stayed, modified, terminated, or suspended in writing by the Reserve Bank, and the agreement does not bar the Board of Governors, the Reserve Bank, or any other federal or state agency from taking any other action affecting Ontario, the bank, or any of their current or former institution-affiliated parties. Pursuant to section 50 of the FDI Act (12 U.S.C. § 1831aa), the agreement is enforceable by the Board of Governors under section 8 of the FDI Act (12 U.S.C. § 1818).

The agreement was executed as of September 24, 2026, and was signed by Doreen M. Dahl, president of Ontario Bancorporation, and Jennifer L. Barney, senior vice president of the Federal Reserve Bank of Chicago. Communications under the agreement are directed to Craig Priebe, assistant vice president at the Reserve Bank, at 230 South LaSalle Street in Chicago, and to Dahl at Ontario Bancorporation, Inc., 315 Main Street, Ontario, Wisconsin.