The Federal Reserve Board announced on Thursday that it had executed a written agreement dated 15 July 2026 with Iuka Bancshares, Inc. and its subsidiary The Iuka State Bank of Salem, Illinois, in a public enforcement action published on the central bank's website.
The written agreement was disclosed through a Board press release on 30 July 2026 and did not carry a monetary penalty.
SUPERVISORY TOOL FOR COMMUNITY BANKS
The agreement requires Iuka Bancshares to serve as a source of financial and managerial strength to the bank, and requires the bank's board to submit within 60 days a written plan to strengthen board oversight of the bank's management and operations.
The bank must also submit plans within 30 to 60 days covering credit risk management, lending and credit administration, loan review, the allowance for credit losses, capital, contingency funding and its BSA/AML compliance programme, and neither the bank nor the holding company may pay dividends without prior regulatory approval.
The Iuka State Bank is a community lender operating from Salem, Illinois, and its parent Iuka Bancshares is a bank holding company registered with the Federal Reserve. The published enforcement page carried both the press release and the underlying agreement document for public inspection.
EXAMINATION FINDINGS
The agreement follows a Federal Reserve Bank of St. Louis examination, with a report dated 27 May 2026, that identified deficiencies in internal controls, credit risk management, lending and credit administration, capital, liquidity and funds management, and anti-money laundering compliance, including Bank Secrecy Act requirements.
Within 45 days after the end of each calendar quarter, the boards of Iuka Bancshares and the bank must submit written progress reports to the supervisors detailing the actions taken to comply with the agreement.
The agreement dated 15 July 2026, entered into with the Federal Reserve Bank of St. Louis and the Illinois Department of Financial and Professional Regulation, remains in effect until stayed, modified, terminated or suspended in writing by the supervisors.
The agreement was signed for the bank and its holding company by president and chief executive Carson Smith.