Regulatory Matters

9 Months Ended

Sep. 30, 2011

Regulatory Matters [Abstract]

Regulatory Matters

Note 13. Regulatory Matters

					To Be Well
					Capitalized Under
			To Be Adequately		Prompt Corrective
	Actual		Capitalized		Action Provisions
	Amount	Ratio	Amount	Ratio	Amount	Ratio
As of September 30, 2011
Total capital (to risk-weighted assets)
Centrue Financial	$  61,992	8.5%	$    58,247	8.0%	N/A	N/A
Centrue Bank	68,428	9.5	57,469	8.0	71,836	10.0
Tier I capital (to risk-weighted assets)
Centrue Financial	$  37,526	5.2	29,124	4.0	N/A	N/A
Centrue Bank	59,272	8.3	28,734	4.0	43,102	6.0
Tier I leverage ratio (to average assets)
Centrue Financial	$  37,526	3.7	40,583	4.0	N/A	N/A
Centrue Bank	59,272	5.9	40,498	4.0	50,623	5.0

As of December 31, 2010
Total capital (to risk-weighted assets)
Centrue Financial	$ 76,459	9.4%	$    65,422	8.0%	N/A	N/A
Centrue Bank	78,171	9.7	64,535	8.0	80,669	10.0
Tier I capital (to risk-weighted assets)
Centrue Financial	$  57,974	7.1	32,711	4.0	N/A	N/A
Centrue Bank	67,823	8.4	32,268	4.0	48,402	6.0
Tier I leverage ratio (to average assets)
Centrue Financial	$  57,974	5.1	45,683	4.0	N/A	N/A
Centrue Bank	67,823	6.0	45,544	4.0	56,931	5.0

On December 18, 2009, the Bank entered into an Agreement with the Federal Reserve Bank of Chicago ("FRB") and the Illinois Department of Financial & Professional Regulation ("IDFPR"). The Agreement describes commitments made by the Bank to address and strengthen banking practices relating to credit risk management practices; improving loan underwriting and loan administration; improving asset quality by enhancing the Bank's position on problem loans through repayment, additional collateral or other means; reviewing and revising as necessary the Bank's allowance for loan and lease losses policy; maintaining sufficient capital at the Bank, implementing an earnings plan and comprehensive budget to improve and sustain the Bank's earnings; and improving the Bank's liquidity position and funds management practices. The Bank has implemented enhancements to its processes to address the matters identified by the FRB and the IDFPR. The Company is in compliance with all the requirements specified in the agreement except for the Capital Plan. Management continues to aggressively pursue capital raising initiatives to comply with this provision; however, until a more definitive capital raise initiative is developed, the Company will continue to be held in noncompliance with this provision. In the meantime, the Agreement results in the Bank's ineligibility for certain actions and expedited approvals without the prior written consent and approval of the FRB and the IDFPR. These actions include, among other things, the payment of dividends by the Bank to the Company, the Company cannot pay dividends on its common or preferred shares, payments of interest or

principal on subordinated debentures, note payable to Cole Taylor, and Trust Preferred securities, the Company may not increase its debt level and the Company cannot redeem or purchase any shares of its stock.

The Company has incurred net losses of $10.6 for the first nine months of 2011 and $65.8 million for the full year 2010 due to loan losses, reduced net interest income, security OTTI, establishing a deferred tax valuation allowance, and goodwill impairment.  The Company is subject to ongoing monitoring by its regulatory agencies and requires regulatory approval in order to make the quarterly interest payments to Cole Taylor under our debt agreements.  Management has sufficient cash at the parent Company and believes regulatory approval will be obtained for the remaining interest payments due in 2011.  Should the Company and/or its bank subsidiary capital levels fall below "adequately capitalized", regulatory actions may be taken including requiring us to have higher capital requirements than those required by Prompt Corrective Action regulations.  During the period the Company had its Tier 1 leverage ratio fall to 3.7% which is below the "adequately-capitalized" threshold for that ratio. Management is not aware of any further regulatory actions at this time.