Fed issues enforcement action with California-based Nano Banc

The Federal Reserve Board executed an enforcement action with Irvine, Calif.-based Nano Banc.

The action — which also includes parent companies Allegiant United Holdings LLC and Nano Financial Holdings Inc. — instructs Nano Banc's board to submit a plan to strengthen board oversight of the bank's management and operations, including, among other things, the establishment of appropriate risk tolerance guidelines and risk limits.

Nano Banc will also have to submit a plan to strengthen credit risk management practices and the concentrations of credit. Particularly, the plan should focus on enhancing the bank's management of commercial real estate concentrations and steps to reduce their risk.

The regulator's enforcement action further addresses a corporate governance and management review and internal controls, including its internal audit. The action also lays out a revision of Nano Banc's allowance for loan and lease losses methodology, its credit plan to maintain sufficient capital, liquidity and funds management, and earnings plan and budget.