U.S. Century Bank ‘undercapitalized’ after $28M loss
South Florida Business Journal by Brian Bandell, Senior Reporter
Date: Monday, October 31, 2011, 11:55am EDT
U.S. Century Bank CEO Octavio Hernandez is talking to three groups about raising capital to help is "undercapitalzied" bank.
U.S. Century Bank fell to “undercapitalized” status after losing $28.3 million in the third quarter.
Not only is the Doral-based bank the largest “undercapitalized” bank in Florida, it is the state's largest recipient of federal Troubled Asset Relief Funds. It the bank cannot raise capital, then $50.2 million in taxpayer dollars could be in jeopardy.
U.S. Century Bank had a total risk-based capital ratio of 6.8 percent on Sept. 30, down from 8.08 percent on June 30. Anything below 8 percent is considered “undercapitalized” and means that a bank must boost that capital ratio or it could face regulatory action.
Federal regulators issued a tough consent order in July against U.S. Century Bank that gave it until early October to boost that capital ratio to 12 percent in order to regain “well capitalized” status. The bank was also told to improve its asset quality, management and anti-money laundering compliance.
U.S. Century Bank CEO Octavio Hernandezsaid the bank did not meet that regulatory deadline, and it submitted a revised capital plan to regulators that detailed its plan for boosting its $71.1 million in Tier 1 capital. Hernandez said he is talking to three groups about raising capital, and he is hopeful that he can work something out soon. The groups include both banks and investors, he added.
5 comments:
Better question is why would anyone keep their money there.
I wonder how much Hernandez makes in salary, and whether he'll continue to get it when we (the taxpayers)contribute our millions.
Octavio Hernandez is grinning like a Cheshire cat because he knows a federal and state sponsored sweetheart, shotgun marriage is in the works which will make US Century’s investors whole.
Sent: Tuesday, October 11, 2011 4:22PM
To: Ileana C. Portal
Subject: questions from ProPublica
Ileana,
I hope you are well. Below are the questions I mentioned I’d send. I’m going to need answers by the end of the day on Thursday.
Thanks!
Best,
Jake Bernstein
Did any U.S Century director or bank official ask any member of Congress or their staff to help with the TARP loan? If so, who?
Did any U.S. Century director or bank official ask any third party to lobby on the bank’s behalf to secure the TARP money? If so, who?
Were there any stipulations the bank needed to fulfill before receiving the TARP loan?
Why did the bank’s profits and other financials decline so steeply in the quarter(s) immediately after receiving the TARP money?
Was U.S. Century not properly recognizing problem loans prior to August 2009? If so, why not?
When the bank received the TARP money, U.S. Century had higher nonperforming and delinquent loans than peers, higher insider lending than peers, less set aside for loan losses than peers and high concentrations in construction and commercial real estate loans. Given those conditions wasn’t the bank ailing when it received TARP money? If not, why not?
What is the amount of insider loans that have been declared nonperforming or delinquent?
The deadlines from the consent order have passed. What steps has the bank taken to fulfill the obligations laid out in the consent order?
According to the consent order, the bank must increase its total capital by about $57 million. How close are you to that goal?
Was there an MOU between the bank and the FDIC prior to the consent order? If so, when was it signed?
Environmentalists accuse the bank of financing urban sprawl and in the process endangering the Everglades. Do you agree with this assessment? If not, why not?
Do you think the bank’s rise and fall exemplifies the fast-and-loose banking culture that led to the financial crisis? If not, why not?
Do you think U.S. Century was used as a corporate ATM for its directors and their associates and family members? If not, why not?
Occupy Miami's next target: US CENTURY BANK!
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