United Bank of Philadelphia, one of the city's smallest banks and one of the last ethnic lenders whose branches once lined city streets, has been in an "unsafe and unsound condition" and its board must make plans to "sell, merge, or liquidate" if it doesn't return to profitability and raise capital this year, according to a consent order signed April 25 by Robert Lopez, director of Pennsylvania's state bank supervisory office.

The report also orders the bank's board to meet more frequently and watch lending and capital plans more closely.

"I frame it as 'a restoration plan,' " said bank president Evelyn Smalls. "The order is focused on getting the capital levels up, generating internal earnings, and getting it to more of a sustainable position."

She said the bank was talking to "various institutions that may have an interest" in boosting United's capital, "because we believe the bank is still needed in the region. Our primary focus is now supporting small businesses" with loans guaranteed by the U.S. Small Business Administration.

With offices in Center City, North Philadelphia, and Germantown, United remains focused on the African American community. After shrinking over the last decade, United Bank grew significantly last year, to $59 million in loans and other assets, from $50 million the year before, as it raised hundreds of thousands of dollars each from Fulton Bank and Bryn Mawr Trust Co., enabling it bank to lend more.

But at the same time, despite lower operating costs for its staff of 22, United's net income declined from an $8,000 profit in 2016 to more than $300,000 in losses in 2017, according to Federal Deposit Insurance Corp. data. Community bankers who run small institutions like United have complained that it's tough to make a profit after years of near-record low U.S. interest rates and expanded regulatory requirements for banks with less than $1 billion in assets — many times what United has on its books.

United has been the subject of a series of regulatory orders urging improved financial performance, operating practices, and capital-raising since a few years after its founding in the early 1990s by a group of African American businesspeople backed by investors in the community, mainstream Philadelphia banks, and the city pension board.

United is the last in a series of African America-run banks that once focused on making loans in the city's black neighborhoods. City and Southern and Berean Savings Bank had previously merged with larger institutions. Italian, Jewish, Polish, and other ethnic Philadelphia banks have combined into mainstream institutions, which are required  under the federal Community Reinvestment Act to make loans and other services available in all parts of the communities where they do business.