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UPDATE 1-Regulators ask Amcore to raise capital levels

Fri Jun 26, 2009 8:13am EDT

Stocks

   

* Says to devise capital-raising plans

* Says defaults on credit agreement

* Sees lower bad loan provision for Q2

June 26 (Reuters) - Loss-making lender Amcore Financial Inc (AMFI.O) said it entered into agreements with its regulators to develop capital-raising plans and to revise and maintain a liquidity risk management program.

The company also said it was in default under a $20 million credit agreement with JPMorgan Chase Bank, as a result of the agreement. JPMorgan advised the company that it does not expect to pursue any "remedies" at this time, Amcore said.

However, the Rockford, Illinois-based company said it expects to record "significantly" lower provision for loan loss reserves in the second quarter, adding that growth of non-performing loans for the period had decreased.

Shares of the company closed at 98 cents Thursday on Nasdaq. They traded as high as $14.50 last September. (Reporting by Anurag Kotoky in Bangalore; Editing by Aradhana Aravindan)



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