Zero-Rated US Century Bank is "Toast" ... by gimleteye

Bauer Financial Ratings came out with its year end evaluation. How is US Century Bank, faring? I asked a local banker who summed it up in one word, "toast". The bank has been looking for an investor for months. 

During the boom-boom years, the directors led by Sergio Pino and Ramon Rasco allowed the institution to operate as a piggy bank for insiders. No questions asked. But we are asking questions now, and not because we want to learn how to run a bank into the ground. We are asking questions now, because back then all the concerns expressed by environmentalists, community activists, and neighbors of the senseless march of suburban sprawl and rock mining westward to the Everglades were ignored by the power structure dominated by lobbyists and speculators.

Back in 2003 Hold The Line, the movement to stop the pressure by speculators to speed the Urban Development Boundary westward, funded a public opinion poll of West Dade residents for the benefit of educating County Commissioner Joe Martinez. Martinez took the results of the poll, showing that the vast majority of respondents did not want more traffic, more development, more congestion and overcrowded schools, and threw them in the trash. 

During the housing boom when US Century Bank rocketed skyward, common sense and concerns for communities, parks and the environment was shoveled to the side to make way for condos and sprawl, the entire purpose of local government was turned over to the Great Destroyers. Using statistics built from pipe dreams, lobbyists persuaded elected officials to do their bidding. 

They are doing exactly the same thing today. The battle for the Urban Development Boundary, through which the board of US Century Bank and others expressed their influence at County Hall, and the collapse of demand despite all the wonderful projections of the Latin Builders Association demonstrates the phenomenon known as "government designed to fail". 

Truth be told, there has been no penalty--none--for its perpetrators. With the exception of VNS, the incumbents remain in office, buoyed by a campaign finance system dominated by speculators. The top lobbyists believe they control the fate of the Urban Development Boundary. Ask Commissioner Xavier Suarez: who controls his proposal for a moratorium on applications to move the UDB? It is the same lobbyists, not common sense, not conservationists, not professional planning staff at the county.

It might help if the public knew whose insider loans are burning pits in the US Century Bank balance sheet. We suspect they are mortgages issued to directors and family of directors at the urban fringe where rock mining and crappy subdivisions, now ghost towns, litter the landscape. 

According to ProPublica, while environmentalists were racing to stop repetitive incursions against the Urban Development Boundary, "... during 2005, the bank had one of its most prolific periods of insider lending; it was in the top quarter of 1 percent, ranking 20th out of 7,954 commercial banks in the nation at the time." (For the underlying politics, read our archive under "housing crash".)

Maybe those insider loans of US Century Bank are for land on Krome Avenue that had environmentalists tied up fighting the state DOT for many years. We haven't heard from US Century Bank director Rodney Barreto for a while: Barreto, a Jeb Bush consigliere, was a principal driving force behind the widening of Krome. In addition to safety and a family tragedy on the road, Barreto also owned a considerable amount of property there. US Century Bank accuses ProPublica of "a very negative agenda". Someone with Barreto's understanding of local politics could explain what Bauer Financial Rating means when it assesses non-performing assets as a percentage of Tier 1 Capital at 428.9 percent. Whose negative agenda, is that?

According to Bauer Financial, in the last three years the bank's accumulated losses are $166 million. Do you imagine taxpayers will be repaid the $50 million paid out to US Century Bank? "It is hard to imagine a more obviously reckless and foolish use of TARP funds than U.S. Century in 2009," said Richard Newsom, a former FDIC bank examiner who has looked at the bank's public financials. "Contrary to TARP guidelines, this bank was in deep, likely fatal, trouble when it received TARP funds. It should have been subject to an enforcement action in mid-2009, not awarded $50 million in taxpayer dollars."