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FINANCE: Fast grower to slow CRE lending
Irvine-based Nano Banc shot to prominence by growing its deposits from zero in 2018 to $950 million as of last June.
Now the Federal Reserve has told the startup to slow down and make sure all the proper checks and balances are in place.
Nano Banc agreed to improve its corporate governance, liquidity, earnings, credit risk management and allowances for loan losses, according to a Feb. 24 agreement with the Federal Reserve Bank of San Francisco.
The bank also acceded to hiring an independent third-party inspector, an unusual request in the banking world.
Nano Banc President Mark Troncale said the exam was conducted more than nine months ago, and that the bank has already taken action on items the Fed flagged in the recently disclosed agreement.
"The company continues to execute on its business plan, including raising over $36.9 million of new capital, remains well capitalized and has addressed the findings from the exam," Troncale said in an emailed statement.
CRE Questions
The Fed's actions appear related in large part to Nano Banc's commercial real estate lending activities.
The agreement calls for "establishment of appropriate risk tolerance guidelines and risk limits including, but not limited to, the CRE lending strategy" at the Irvine institution.
Within two months of the agreement,...