US Century Bank: reward for failure ... by gimleteye

The absence of accountability for the worst financial crisis since the Great Depression is appalling. No investigations. No jail for the perpetrators. Even now, five years after the collapse of Lehman Brothers, top executives at the "too big to fail" banks are walking with hundreds of millions of dollars of compensation. At a more granular, local level, the same reward for failure is occurring at smaller banks. The preeminent example is Miami's US Century Bank.

It's been a year since ProPublica's piquant expose of U.S. Century Bank: the piggy bank used by political insiders to help spread suburban sprawl like a noxious weed into West and South Dade. The toxic story of US Century Bank is not just sprawl: a land use pattern that strips communities and civic life of vitality while remaining agnostic and pure as driven snow on a bank balance sheet.

According to US Attorney Alex Acosta, Miami is the "graduate school of fraud". The pedestrian forms of prosecutable fraud -- from Medicaire scammers, to mortgage fraudsters, to local Ponzi schemes -- would not be so prevalent if not for the tolerant atmosphere for legal forms of exploitation that pervade downtown Miami and the insular, parochial community of lawyers and bankers and lobbyists who control the political levers. These excesses rarely are discussed or brought up for scrutiny by the maintream media (Tom Wolfe missed this story), until something spectacular occurs. Something like the phenomenon of US Century Bank.

US Century Bank in El Nuevo Herald ... by gimleteye

EOM has tracked the US Century Bank story all the way back to the wild lands of the Homestead Air Force Base fiasco and the prominent role played by its directors, including Sergio Pino and Ramon Rasco, in the zoning and planning of sprawl. Now, a recent ProPublica news report on US Century is reprinted in El Nuevo Herald. While it is an amazing story, readers can't help but notice it is a story that the Herald entirely missed. Hopefully, the ProPublica report will also be published in The Miami Herald and that other mainstream media will explore the influence of this rogue bank and its board of directors in Florida. EOM asked the question before and we will ask it again: this bank received the largest infusion of tax dollar supported TARP money in the state of Florida at a time when it was failing. How did that happen? It either cooked the books, or, was helped along powerful friends in DC. There are many reasons that turning over this very big stone is unpalatable to either political party. It is not just Wall Street: it is also Main Street and the public has a right to know.

US Century Bank on the rocks: will top insiders wriggle away from the law? ... by gimleteye

This U.S. Century loan was a second Mortgage for Marco Rubio (it was undisclosed on his Financial Disclosure at the time) and the subject of a 2008 Miami Herald probe. The Rubio property is now underwater with a purchase price of  $550,00 and current market value of $384,900. - Miami Dade County Clerk Records

Credit South Florida Business Journal's Brian Bandell with the intrepid journalist of the year award, for taking on the joke of a banking institution: US Century Bank. The Miami Herald fears to tread on the insider lawyer/business elite who swim in lazy circles around Miami and Miami Dade County government. The newspapers publishers and executives have always fostered a cozy relationship with special interests whose business models depend on extracting value from farmland and open space, including Everglades wetlands, in order to proliferate suburban sprawl like a cancer across the South Florida landscape. Who is to argue they weren't successful?

US Century Bank was established by Ramon Rasco and Sergio Pino, two of the top political insiders, to provide mortgages and underlying financing for their business models. US Century Homes fashioned itself as the local Cuban American version of Lennar: vertically integrated to provide the lowest cost, mass market product to buyers ginned up by the housing boom mirage. It turns out the bank's lending practices extraordinarily favored directors, including Rodney Barreto, Jose Cancela and the owners of Sedanos supermarket chain. (US Senator Marco Rubio's home mortgage originated with US Century Bank, at a time Mr. Rubio showed practically no net worth. But that, for insiders who benefited from US Century's piggy bank, is just the tip of the iceberg.)

Eye On Miami has tracked US Century Bank for years. Beginning in the mid-1990's, I dedicated nearly six years to fighting the Homestead Air Force Base fiasco, triggered by Rasco and his cronies at the Latin Builders Association who commandeered county government -- and untold tens of millions of taxpayer resources -- in the brazen attempt to lift ownership of the military base from the Department of Defense into the hands of private investors, eventually including Mas family interests. Today, Rasco is managing partner of a law firm that includes clients like the Fanjul sugar billionaires.

The fight for the air base was won -- if that can be called a victory -- by conservationists, but the subsidiary battle, to prevent suburban sprawl from invading South Dade like a toxic weed, was decidely lost during the housing boom that gobbled up farmland and restored the dreams of Rasco, Pino et al. while shunting environmental protection to the side.

We called US Century Bank, "the insider piggy bank", based both on evidence disclosed through FDIC reporting (see our archive) and quarterly analyses by Bauer Financial. We gave up reporting on the Bauer Financial reports once US Century Bank, bottoming out at a "zero" rating, seemed destined to collapse under the hubris of its founders and directors. Why the FDIC didn't shutter the bank is a mystery probably tied to other forms of influence peddling. It was, after all, according to South Florida Business Journal, the most undercapitalized bank in the United States and, in Florida, the largest recipient of TARP funding.

It is ironic that Republican Tea Party activists, who hated TARP -- the Bush and Obama effort to re-float the US banking system by injecting no-cost money into banks' balance sheets so they might lend out to people and businesses at prime rate and above -- failed to criticize US Century Bank or the Republican insiders who used it as their piggy bank. Both Pino and Barreto -- a Bush consigliere-- were some of the most visible GOP fund raisers in Florida. (Rasco showed up, in the last election cycle, hosting a fund raiser for Democrat, US Senator Bill Nelson.)

In a Nov. 26 report, Bandell writes about a shareholder lawsuit brought against US Century Bank:

The complaint alleges the bank was created to help its directors and their friends and family members finance construction projects under unusually favorable terms under lax underwriting standards. The complaint cited the high level of loans to bank insiders and nine of 24 branches being leased from bank directors Pino, Guerra and Herran in 2011.
Banking regulators allow insider loans and leases as long as the insiders don’t vote on them and the terms are comparable to market conditions. C1 Bank’s merger agreement calls for the rental rates on the insider branches to be reduced. The lawsuit alleges the rents for the insider branches were above market value.
The insider loans had little underwriting scrutiny and U.S. Century Bank’s loan transactions were used to help its directors and business associates gain political leverage, the complaint alleges. Davila previously told the Business Journal that U.S. Century Bank hasn’t taken any losses on its insider loans, but it has taken reserves for potential losses on them and some of those loans were modified in “troubled debt restructuring.”
“The defendant directors wasted corporate assets by, among other things, failing to supervise the unproportional level of insider lending which led to an over-abundance of non-performing loans, employing a liberal loan forgiveness program for insiders and/or their friends and business associates which were more favorable than those available to normal customers of the bank, failing to ensure diversification of the bank’s assets so as to avoid the risk of the bank’s undercapitalization and using the bank branch locations as an avenue to maximize personal profit for those defendant directors who owned the properties which housed said branches," the complaint states.

Late yesterday, US Century shareholders -- a large percentage of the banks's shares are held by insiders including Rasco -- voted to approve a shotgun marriage with Brazilian investors who recently created C1Bank, based in Tampa, that has rolled up a few other similarly distressed community banks. Under the terms of the agreement, US Century shareholders are essentially wiped out, but so are US taxpayers who will only receive $6.27 million of the $50.2 million US Century owed.

Rasco et al. still have to deal with furious shareholders. It is clear that many were left in the complete dark about the internal machinations. But whether the details ever see the light of day is in doubt. The current owners and former US Century insiders like Rasco are counting on business insurance protecting directors to kick in and for some settlement to be reached that hides the sordid details of Miami's insider piggy bank.

Eye On Miami guesses that there are many, many Miami and Miami-Dade County political insiders rooting for the whole rotten mess to be buried far from sight and all the damning paperwork to be thrown into an Everglades canal. Lifting the rocks covering US Century Bank loan details like those mega-tracts outside the Urban Development Boundary (Krome Gold) would provide a close-up view how political influence peddling really works. At the end of the day, Rasco and his fellow insiders can forcefully argue for letting the whole US Century Bank story sink beneath the waves.

There are a thousand reasons (no, closer to 44 million reasons) taxpayers deserve to know those details: those who do not understand history are bound to repeat it. That is, though, how we roll.

US Century Bank: time to stop the madness ... by gimleteye

The US taxpayer is still on the hook for US Century Bank, founded in 2002 to take advantage of the building boom in South Florida and representing-- as we have documented at Eyeonmiami-- the biggest GOP lobbyists and boosters of suburban sprawl in Miami-Dade. This model of growth went haywire in the nation's fastest growing regions, but especially in Miami-Dade where its organizers had also perfected the work of extracting campaign cash from low cost, platted subdivisions. Let the landscape reflect the claim: ghost suburbs, abandoned homes, and decaying neighborhoods. It was all championed as "what the market wants" but it really was what the market could finance, generating hush money for media corporations while throwing off billions in bonuses and compensation for the webs of commercial interests represented best, here, in the board of directors of US Century Bank.

According to just released reports by Bauer Financial, the Gables based banking analyst based, US Century is still the largest commercial bank debtor to the US government in Florida, owing at least $123.4 million. Ramon Rasco, Chairman and one of the lead organizers of the Homestead Air Force Base fiasco, recently partnered in a big ticket fund raiser for US Senator Bill Nelson, a Democrat.

One of the anomalies in FDIC supervision of US banks is that spokespersons for US Century can state, without lying, that the bank is "adequately capitalized". Nevertheless, Bauer metrics gleaned from regulatory filings show US Century is in so much trouble that the bank warrants a "zero" rating for the past two quarters, Bauer's lowest rating. By those yardsticks, it is a candidate for closure.

Since the housing crash, insiders like the board of US Century have been counting on the revival of their business model: conversion of farmland and wetlands into suburban sprawl. Waiting and waiting. Members of the board were some of the biggest speculators and investors charging after farmland on the other side of the Urban Development Boundary. They were likely behind the scenes players in Tallahassee this year, as well, arranging for support to destroy the state authority that held the Urban Development Boundary to be a legitimate state protection for Miami-Dade taxpayers and the environment. They may have knocked the barriers down but they killed the market.

So one remaining question, as the national economy sputters and the sprawl model of growth remains bankrupt: will US Century investors and insiders have time to recoup their investments before the feds close it down? This waiting game is symptomatic of the Great Recession: no one is held accountable. No one goes to jail. There is no economic policy beyond hoping that the same engine kicks back in, that drove the economy into the ground. (Casinos and full-scale gaming is the best, new idea from special interests whose principal businesses are other forms of gambling.)

At US Century, non-performing loans as a percent of Tier 1 Capital (ie. the money you and I guarantee in the form of US Treasury loans) are steadily rising; from 147 percent to 184 percent in the last quarter (ending March 31, 2011). For its peer group -- the best measure of how US Century stands up to other similarly sized banks in the nation -- its non performing asset ratios are staggering. For instance, as a percentage of net worth its peer group has 2.23 percent non-performing assets. US Century's is 38.8 percent.

In the last quarter, loans to insiders as a percent of total net worth increased to 84.4 percent from the prior quarter 75.5 percent. Its peer group metric for comparison: .88 percent. That's a shocking statistic. One interpretation: that US Century only exists to cover its loans to insiders.

To the extent there has been any improvement at all, from quarter to quarter (as US Century spokespersons will undoubtedly tell the business press) it is due to shifting numbers: the bank lost more than $40 million in each of the past two years and last quarter's loss of $16 million puts it on a track for record losses in 2011. It will claim it has "made progress" paying down obligations to the federal government, but its history as a piggy-bank for insiders in Miami-Dade continue to drag down the comparative ratios.

Miami is not good at reconciling fictions and fact. Watch how rezonings outside the Urban Development Boundary begin to pick up steam in Miami Dade. This accompanies news in the business press that the markets for financial derivatives formed by the nation's largest banking institutions, tied to mortgage pools, are starting to revive. Whatever that means. Once the new mayor is elected, that will be where the action is for the US Century insiders. Until the FDIC comes in and shutters the doors.

Miami's troubled US Century Bank ... by gimleteye

US Century Bank represents the hubris of the housing boom and crash; wealth through land speculation, converting farmland and open space to suburban sprawl, and replacing wetlands with subdivisions. That, in a nutshell, is US Century Bank. Although US Century had plenty of company among the gears and cogs tying up to the Wall Street profit machine, its stands out for a board of directors including Jose Cancela and Rodney Barreto whose lobbying work at County Hall is modeled after the bank founder, Sergio Pino who turned a plumbing supply business into political influence at Miami International Airport, then parlayed a fortune into US Century Homes, and a prominent political role in the ascendency of Gov. Jeb Bush and President George W. Bush. His showroom on Le Jeune Avenue near MIA was once Bush Campaign Headquarters. It is now a weekend flea market.

Altogether the Wall Street profit machine needed a thousand places like Miami-Dade to drive the US economy off a cliff with its trillions of unregulated financial instruments tied to derivatives fabricated from housing and related development. But Miami-Dade was very special, and US Century Bank a special place in the constellation.

US Century Bank stands out because its founders, GOP consiglieres like Barreto and political insiders including bank chairman Ramon Rasco, long ago had the Miami-Dade County Commission "wired" for zoning approvals and the rubber-stamped growth-at-any-cost. Rasco was the principal organizer of Homestead Air Force Base Developers, Inc., or, HABDI and the no-bid deal to convert the air base into a private commercial airport; a deal that crashed and burned in 2002 -- although its litigation lingered on-- and one of the greatest boondoggles in Miami history. Natacha Seijas, the county commissioner who was ringleader of the HABDI plan on the inside, is now subject to a second recall effort by voters who likely have no idea of her role as top facilitator.

In the past year, US Century Bank fell to "troubled" status according to Bauer Financial. Although Bauer rates the bank as "well-capitalized", the bank likely includes $50 million from the Troubled Asset Relief Program, or, TARP, in its Tier 1 capital.

Where US Century really stands out, though, from in the Bauer Financial universe is the category of loans to insiders. As a percentage of total loans, US Century loans in this category is 44 times greater than its peer group, as of Sept. 30, 2010. As a percentage of bank net work, loans to insiders is 80 times greater than its peer group.

In November 2009, Miami New Times reported, " ...The bank's chief credit officer, William Garzozi, says U.S. Century adheres to strict federal banking rules. Directors, he says, are offered the same rates and terms as regular banking customers. “And there is a limit as to how much you can lend,” Garzozi says. “We are nowhere near our limit.” Asked if any of the insider loans are behind or in trouble, Garzozi replies, “No, not at all.” In 2009, the bank lost $44 million.

As of Sept 30, 2010, Bauer offers the following statistics:


US Century Bank represents the business model of land speculation in farmland outside the Urban Development Boundary. Drive out to the edge of Krome Avenue on a quiet Sunday: see what the end of the housing boom looks like. It includes bank branches of US Century, waiting for the next tranche of sprawl to glide through the permitting mills. It is a forlorn part of the world and didn't need to be that way. US Century Bank got what it wanted, and so did the Miami Dade County Commission in the ragged edge of ghost suburbs, a tidal wave of foreclosures, and no accountability. None at all.

FDIC: Shut down US Century Bank, now ... by gimleteye

The astounding report by ProPublica on US Century Bank shows the nation's banking regulator, FDIC, asleep at the switch when the largest distribution of TARP funds in Florida was made to politically connected directors of the Miami-based bank who substantially shaped the state's political landscape. (Every county commissioner in Miami-Dade County, who solicited for money through US Century Bank, its friends and family as the housing boom metastasized in wetlands and farmland in West Dade and historic Everglades, knows exactly what I mean.)

"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."

US Century Bank would have been closed down years ago, if not for the cash infusion of tax payer-backed dollars through TARP. The question is not answered: how did FDIC miss the disaster at US Century? With respect to the TARP moneys, either US Century lied in its filings and "cooked the books", or, it received a political push from its friends in DC. Whatever the answer, the public deserves to know. To ProPublica, the bank issued blanket "no comment" and refusal to answer phone calls.

Those details could be disclosed in a FDIC enforcement action against US Century and its directors, including Ramon Rasco-- key figure in the Homestead Air Force Base fiasco--, or shareholder lawsuits. If there are investors gullible enough to take over US Century now, the details could be buried for a considerable length of time.

US Century Bank became popular as "local boys made good". Depositors have no idea. Bank directors bet the farm on land speculation; manipulating local government processes, turning a federally chartered bank into a personal piggy bank (US Century Bank is rated "zero" by Bauer Financial. Measured against peers, its ratio of insider lending to standard banking metrics is off the charts. So far, there is no way to know exactly what loans, for mortgages in what areas of Miami-Dade, those ratios connect to.), tying up environmentalists and citizens and neighborhoods in knots, from Doral to Homestead. When environmentalists cry "foul" and say the playing field isn't level, this is exactly the example: civic groups cobble together a few dollars to support outreach efforts like "Hold The Line" on the Urban Development Boundary (the target of US Century Bank directors/speculators while regulators in local and state agencies cower in their foxholes) while the lobbying effort of insiders is funded by manipulating banking rules and laws.

From a 30,000 foot view, all the environmental skirmishes -- from water quality to wetlands to the Urban Development Boundary, Everglades Restoration and the fiasco of Homestead Air Force Base (Ramon Rasco and partners) that tied up the 2000 presidential election in Florida -- were for naught. It was about the crack cocaine of the housing boom and the massive wealth transfer grounded in arrogance and greed.

The public was taken for fools then, but the tables are turning in the worst economic crisis since the Great Depression.

To find a symbol of what went wrong, and is still going wrong: take a close look at US Century Bank. Earlier this summer, the FDIC issued one of the toughest Consent Orders ever. While the FDIC isn't required to publicly disclose an update, the public should demand one now.

US Century Bank deal goes bust … for the second time … will there be a third or is it time, finally, for the feds to step in? by gimleteye

The insider piggy-bank founded by Latin Builders Association chiefs Ramon Rasco -- also, of the Homestead Air Force Base fiasco -- and Sergio Pino -- of a cratered house building empire and abdicated king of suburban sprawl -- is desperately seeking new capital. Eye On Miami has tracked the fortunes of the bank and its connections to campaign cash and influence that propelled Jeb Bush and Marco Rubio to the forefront of right wing Florida politics. (Go to our archive, under "US Century Bank", for past posts.)

The Miami Herald did its level best to promote the bank. Its editors and publisher, organized through Linkd-In like connections through Greenberg Traurig, the insider land use and zoning black hats for decades, formed a virtual cartel in support of sprawl. It wasn't enough of a cartel, though, for Sergio Pino's tastes.

In the mid-2000's (the date maybe can be provided by a past or present reporter who was there at the time), the Herald entertained an extraordinary event in its newsroom. Pino and Armando Codina were granted, by the publisher, an opportunity to address the journalists along the line of "explaining" how the newspaper's coverage was too hostile to their industry. A pep talk for sprawl, and by extension, the fortunes of a local bank -- US Century -- that was straight-out stoned on the fumes of the housing boom.

Among many low points, it certainly ranked as perhaps the lowest point in the history of the newspaper. (The lowest point was former Miami Dade County Chairman Art Teele blowing his brains out in the lobby of the newspaper. For all the media's focus on the inexplicable and "erratic behavior" of Teele, the bright fact is that Teele's paranoia was built on a political career fighting against the various influences and schemes of the Latin Builders Association, including that privatization of the Homestead Air Force Base that he strongly opposed.)

US Century Bank lent an extraordinary amount of money to bank board directors to purchase land at speculative values at the edge of the Everglades, outside the Urban Development Boundary. The play was always for farmland, where zoning could be converted cheaply in comparison to the zero lot line housing that followed along in its place. To be fair to the Latin Builders, lead by Pino and Rasco, they were slip-streaming behind the profit model of massive sprawl developed by Lennar, Miami's only homegrown, Anglo-owned Fortune 500 homebuilder.)

EOM frequently reported on the bank's ridiculous metrics (Loan ratios to insiders) required by federal banking regulations -- not reported by the Herald, of course. Nor did the Herald ever report that many of the bank's branches were leased on real estate at highly inflated values that was also owned by board directors.

As objectors and leaders of the battle against more suburban sprawl in Miami-Dade, US Century Bank was the juggernaut that erased all possibility of civil exchange and compromise on the future of the county at the Miami-Dade County Commission. What we call "the unreformable majority" were squarely in the US Century Bank court. (The basketball stadium at FIU -- the most important sprawl anchor in West Dade) bears the bank's name.

For the pain and suffering of civic activists, there are no tears shed for the cratered fortunes of the bank. Most of the original founding directors have resigned. In December 2013, Ramon Rasco -- in anticipation of the year-end transaction with a new tranche of insiders heralded by the Herald -- thew in the towel as chairman of the board.

But the transaction did not close by December 31, as required by the prospective deal makers. The Herald is an unreliable source of news on reasons why, as it has been since the beginning. Who got cold feet? Why?

On the debit side of the ledger: a lawsuit by dissenting shareholders that is still in play, over-inflated values on remaining insider loans for that land at the edge of the county that fueled so much nonsense at county commission meetings over many years; with Natacha Seijas, Joe Martinez, and Pepe Diaz fronting for their "friends of family" at US Century. There is also a rumor of federal penalties for money laundering. And then there is the fact that US Century Bank has been kept afloat only thanks to the largesse of the taxpayer: that would be you and me.

US Century Bank, whose founding directors are Republican to the core and presumably in favor of markets free from government regulation, were saved by $50 million that the bank still owes the US Treasury. The amount of capital that the bank's new investors will be required to put up, depends on how successfully they can weasel out paying back you and me. The bank's founders want to make off with the money; that is to say, they want the TARP money to disappear as a debt obligation.

In all its press releases, US Century Bank is unrelenting in its conviction that the bank is an upstanding member of the community. Well, they do have a (declining) deposit base of nearly $1 billion. We guess US Century Bank's depositors read Eye On Miami in inverse proportion to the percentage of bank directors who do.

US Century Bank continues to lose money, and who will put more money into a money-losing bank? Probably a bank that needs the branches to expand its footprint in Miami-Dade; one that is agnostic to our non-financial concerns. That would be all banks. Non-financial, except that not one shareholder associated with the bank should be allowed to walk away with a deal until every last cent of taxpayer money is repaid.

Here is one way of interpreting US Century Bank's record, if you are a Republican banker or supporter like US Senator Marco Rubio (whose mortgage was issued by US Century), you get to pound the table daily about the failure of federal regulations and federal government, but you don't also get to steal taxpayer money via an industry bailout that chose winners and losers like US Century.

We wish the city's daily newspaper had done its job, reporting the real story of the 2000's building boom and bust and the role that insiders played in distorting public policies and government to speed our way to economic and financial wreckage. It puts EOM and our readers in the position as observers of the dust rising from its broken walls and busted foundation.

US Century Bank: barely floating with $1.6 billion in deposits ... by gimleteye

In a just world there would be a trial of US Century Bank and its founders in Miami, Florida, who were just slapped with what might be one of the harshest, if not the harshest, consent orders in US banking history. And if there were a trial the insiders who used US Century as their piggy bank would also be called to account for turning a federally chartered institution into a political apparatus to control the local levers of power governing zoning and permitting in farming and wetlands. But it is not a just world, is it?

The closest view the public may ever have of justice is the federal Consent Order slapped on US Century, its officers and directors by the FDIC (Federal Deposit Insurance Corporation) with its pale disclaimer: "(US Century Bank) has consented, without admitting or denying any charges of unsafe or unsound banking practices or violations of law or regulation related to weaknesses in asset quality, management, earnings, capital, liquidity, and sensitivity to market risk, to the issuance of this Consent order by the FDIC and OFR (Florida Office of Financial Regulation)."

US Century Bank was the late manifestation of the empire, now vastly reduced, of uber lobbyist Sergio Pino. It started as a simple plumbing supply business and leap-frogged to vertical integration with mass produced housing; a local aspirant to Lennar, one of the nation's largest homebuilders whose fortunes were built from mass production housing in the former Everglades. Pino's chief lieutenants, Ramon Rasco, Rodney Barreto, Jose Cancela, Armando Guerra, and others; built fortunes from the ring suburbs, growing like a toxic culture in a petri dish. For the model to work, the builders required minimum friction and speed in execution; that meant quick zoning to provide housing and supermarkets and strip malls, and then financing and connections to off-load commercial and residential mortgages. Unlike Jorge Mas Canosa, whose corporate empire was built on county road contracts and a highly public persona, the growth of US Century Bank started in the chamber and hallways of the county commission but the main operators retreated from view and hid within boards of lobbyist associations like the Latin Builders and South Florida Builders. They erected legislative turnstiles and gates barring the public from seeing how the worst economic bust since the Great Depression was built into the model.

Unless there is a forensic audit of US Century Bank that reaches the public, we will never know the exact details (and The Miami Herald, whose leadership was complicit in its own way with the downtown power structure, lawyers, and lobbyists for the housing boom will not be of much help except to provide facts without context or commentary.) But we can imagine both the just world and the trial.

The deposed witnesses would include every elected official who counted on the builders and developers in South Florida for campaign contributions that tie back to US Century Bank. Their votes on the Urban Development Boundary and infrastructure serving the bleak suburbs of Miami-Dade County (like those surrounding Tamiami Airport or Homestead Air Force Base) were oaths of allegiance to the speculators and thieves who claimed to be delivering "what the market wants" while fattening their bank accounts. Their defense: "there is no crime playing the system better than our opposition."

The witness list would include former Miami-Dade Mayors and their county managers; Alex Penelas, Armando Vidal, and Steve Shiver, Carlos Alvarez, former county commissioners Barbara Carey Shuler and Carrie Meek, Miguel Diaz de la Portilla, Jimmy Morales, recalled commissioner Natacha Seijas, her ex chief-of-staff Terry Murphy, sitting commissioners Joe Martinez, Javier Souto, Pepe Diaz and Dennis Moss, Barbara Jordan and Audrey Edmunson and the phalanx of political consultants who serve them including Armando Guttierez. It would also include past and county department heads; John Renfrow, Miami Dade Water and Sewer, Bill Brandt, and former DERM chief Carlos Espinosa. By taking apart the insider dealing and political operations of US Century Bank, the trial would expose how $7 billion in infrastructure deficits accumulated; how those deficits served the business of bankers and developers and how Chamber of Commerce values ("Growth pays its own way") eroded our quality of life, water quality and our Everglades and dimmed our economic prospects by setting South Florida on a course where only more growth and development could bail us out. The disclosures would paint the picture of corporate politics disguised as democracy; from county commission races to presidential campaigns like the one that delivered the United States to George W. Bush through the halted recount in downtown Miami and its legacy, FreedomWorks. (for more, you will have to read our archives).

One has to read between the lines of the FDIC Consent Order with US Century to understand just how suspicious and mistrustful federal regulators are. Over this week, we will focus on a few of the highlights. For example on Page 3:

The implication is that official records of the Board of US Century Bank or incomplete or maybe in a storage box that can't be found. Complaints to the Florida Bar Association and to the Division of Professional Regulation would be in order. If only it were a just world.

US Century Bank, Zero Leadership, Credibility, and Zero Rating ... by gimleteye

On the same day that Sergio Pino announced his resignation from the board of the bank he founded, US Century Bank had more bad news: the ratings agency, Fitch, withdrew its rating. In a public statement to South Florida Business Journal, Pino said his withdrawal had nothing to do with the severely deteriorating condition of the bank.

Pino, along with other bank directors, have been major Republican campaign contributors and lobbyists for suburban sprawl in Florida wetlands and farmland. They have strongly supported and pushed for the expansion of the Urban Development Boundary in Miami-Dade to include lands purchased as speculative investments for future platted subdivisions and sprawl. The bank they founded has been the recipient of the largest infusion of federal taxpayer moneys, through TARP, among all Florida banks.

Also on March 15, Business Wire reported on the mounting troubles at US Century, "Although the company remains above minimum regulatory capital standards to be considered 'well-capitalized', Fitch believes that, given the bank's CRE and construction portfolios, the embedded losses will deplete capital further. In Fitch's opinion, USCB will likely need to raise additional capital. It is also extremely likely that the bank's regulator will place capital requirements on the bank through a regulatory agreement." Business Wire notes that the new Fitch rating, by definition, considers US Century Bank to have exceptionally high levels of credit risk.

Fitch noted, also, a lack of information provided by the company. Eyeonmiami has written extensively about the role of US Century Bank and its founders, including Sergio Pino, in fomenting the housing and construction bubble in Miami-Dade and, by extension of its political influence, in the state of Florida. For example, US Century investors and shareholders are prominent owners of land outside the Miami Dade Urban Development Boundary, bought in some cases at the height of the real estate bubble. Last week South Florida Business Journal reported that Pino’s 77 Acres LLC lost a $22.6 million foreclosure judgment over a site in Hialeah Gardens. BankUnited is suing Pino for $34 million on a Doral project, Century Grand. In 2009, Pino reportedly was seeking to create a visa program to allow temporary residency visas to foreigners if they invested in his project. Wachovia Bank, in Dec. 2009, hit Pino with a $65.5 million foreclosure lawsuit for Century Grand. In addition, Pino was battling recovery by Mercantil Commercialbank of a $4.4 million loan for an office building in Coral Gables.

Another bank rating agency, Bauer Financial based in Coral Gables, has noted that among the bank's problems-- leading to a recent rating of "zero"-- are the extraordinarily high level of loans to insiders, as expressed as a percentage of total loans; nearly ten times higher than similarly sized banks. It is possible that US Century's disclosure of the exact nature of those insider transactions would prove an embarrassing connection to politically connected individuals in Miami Dade County. Like the 2008 disclosure that US Senator Marco Rubio, with little worth at the time, in 2005 at the height of the real estate bubble obtained a $135,000 equity loan from US Century to the purchase of a $550,000 home in West Dade. Rubio failed to disclose it until three years later. So much slipped through the cracks.

In the last quarter of 2010, US Century Bank lost $44.7 million. In 2008, the bank received the top minority business award from the Greater Miami Chamber of Commerce that was the victim of a $2 million theft by its financial auditors in 2004. Absent federal rescue, US Century would not have survived. Some banks are too big to fail, some banks should be allowed to sink of their own weight. In that category, would be Ocean Bank-- another favorite bank with sprawl developers-- that in July 2010 extended a $39.1 million loan to Pino for another condominium project in Coral Gables. The due date on that loan, according to South Florida Business Journal, is April 30. There is no similar expiration date on the enormous political pressure brought to bear on county governments and the state legislature by lobbyists using the economic crisis to eviscerate environmental regulations, hoping that a free pass to build more sprawl in wetlands and the Everglades will refloat their speculative investments. A yacht owned in whole or part by Pino sank two weeks ago in a Coral Gables canal.

US Century Bank, Tied To The Hip With The Miami Herald ... by gimleteye

At first I thought the April 1st Miami Herald paean to the resurrection of US Century Bank was an April Fool's joke. But I was wrong.

"Will This Bank Rise Again" is one of the strangest PR pitches I've ever read in the Herald (online edition, thank you).

To get the true story of US Century Bank, readers will have to use our search engine to read the lengthy commentaries and back stories; you won't find it anywhere in the Herald.

Why?

The Herald reports in the second paragraph, "The plan stayed on track for a few years until the recession deepened, bad loans mounted and capital was depleted, putting U.S. Century’s very survival in jeopardy."

There is no mention of the thru-line that Eye On Miami discloses: that US Century was built by a board of directors dedicated to the business model of converting wetlands and farmland to suburban sprawl. The political influence peddling by board directors, lead by Ramon Rasco and Sergio Pino, literally turned Miami-Dade government into a hostage state.

The political origins of the housing boom in South Florida advanced the fortunes of governors, like Jeb! Bush, and presidents, like George W. Bush. This story was uninterrupted by the biggest real estate crash since the Great Depression, built on the fumes of derivative finance and salesmanship that the Miami Herald never, ever attempted to link for readers.

And as we have written in the past, the reason is that Herald revenue and income substantially depended on telling these stories a certain way, so as not to offend advertisers and insiders, like the land use lawyer lobby in tall skyscrapers downtown who rub shoulders with Herald brass.

There is nothing of these relations, naturally, in the Herald report.

At its inception, U.S. Century founders, homebuilder Pino, attorney Ramon Rasco, Sedanos family members Manolo Herran and Armando Guerra and gun manufacturer Carlos Garcia had grand plans to create a successful bank.

After all, they had already succeeded with Ready State Bank, which was started in 1983 with $3 million and was sold in 1999 for $150 million, making fortunes in the process.

“Once we sold the bank, it was always on our minds that we would do it again,” said Pino, during an interview in his office late last year.

So they brought in more well-connected directors: Dade County Bar Association President — and later Florida Bar Association President — Frank Angones, Spanish television executive Jose Cancela and lobbyist and Super Bowl Host Committee Chairman Rodney Barreto, adding Herran’s son Augustin to succeed his father once he retired.

“This was a dream team,” Pino recalled. “We were going to create a great bank.”

What they created was an insider piggy bank of proportions noted by Coral Gables bank analyst, Bauer Financial, with insider loan ratios that may have been among the highest in the nation. The insider transactions extended right to County Hall. One anonymous reader of Eye On Miami commented that during the housing boom, there was a special US Century Bank loan officer delegated to handle loans to county employees. No questions asked.

The Herald glosses over the 2011 FDIC order against US Century Bank. In the ProPublica investigation of the bank by former Miami New Times writer, subsequent Pulitzer Prize winner writer Jake Bernstein noted that one government bank investigator, recently retired, said he had never seen a bank with so many abuses that had not been shut down through enforcement.

In response, Ramon Rasco and other bank investors have expressed nothing but sunny skies for their great community bank. Not a single mention is made of the way that environmental and civic organizations spent decades fighting like David against Goliath the influence peddling that trashed Miami-Dade's quality of life, natural resources, and shifted multi-billion dollar infrastructure costs onto the backs of taxpayers. They called it 'progress'. We call it 'fraud'.

The Herald report white-washes these criticisms.

The suits cite the bank’s large volume of insider loans and other dealings, including that one third of the bank’s 24 branches are leased from current or former directors.

Dávila, who joined the bank in August of last year, said that U.S. Century has modified terms of its loans to past directors Pino and Barreto. Pino, for example, provided more collateral and agreed to a rate increase. Dávila said that all loans to insiders are being paid on schedule.

Readers would like to know if the Herald demanded to see the evidence, to support this claim. What is also relevant is where the land is. We believe much of it is outside the Urban Development Boundary. We would also like to know, what is the record of loan and principle repayment by the "insiders" since the banking crisis in 2008. And we would also like the Herald to issue a disclaimer related to inviting US Century Bank founder Sergio Pino and Armando Codina into the newsroom, to address staff, to pitch what great contributors do for the local economy.

These omissions lead an informed reader to wonder if the Herald editor tasked the reporter to write an up-beat story that would weight against further sanctions by the US government. As in, "Don't miss the criticisms, but don't elaborate on them either."

The new Genting big gambling effort for Miami/Jorge Perez/Jimmy Tate money will be in charge (Perez is a Fortune billionaire, having bluffed his way into the "too big to fail" category of condo developers who would have been shut down by the banks, if the federal government held banks accountable for unstable derivative financing that shattered the US economy. Perez tied his fortunes to his lenders, the way the Miami Herald tied itself to its advertisers ... ), while avoiding -- presumably -- a string of nasty lawsuits that could bring to light more data and facts on the rampant abuse of banking rules and regulations. Eye On Miami has written at length on the Genting/ Perez connection. Use our search engine to read more.

It is a mystery why US Century Bank hasn't been shut down by the federal government. The answer could be in the way US Century Bank directors bound themselves tight, through campaign contributions and fund raising, to a variety of elected officials. The power of South Florida representation in Florida and, by extension, the nation cannot be easily dismissed.

But even if you take exception with our depictions of the Growth Machine, and explanations how the gears mesh from local county permitting officials, to county commissioners standing as land use authorities, to lobbyists and mortgage bankers, Wall Street and presidents, here is what also can't be dismissed: US Century Bank was the largest recipient of TARP (that is, taxpayer) financing in Florida and the largest for a bank its size in the United States. There is $50 million outstanding debt that is owed by the bank, to US taxpayers. The Herald report seems to gloss over the fact as though losing the money was just a sign of support for people who run a great economy. If you are a Republican, Democrat, or Tea Party iconoclast; write to your senators and to the US Treasury Department and INSIST that all the money be repaid to taxpayers as part of any deal. Pay the money back. No discounts, no hair cuts, no white washing theft.

US Century Bank Deal Does Not Pass Smell Test

The Miami Herald published yesterday the latest in a series of puff pieces on the insider piggy bank, US Century Bank. "Miami may be a major metropolis, but in certain circles, all it takes to raise the capital to buy a $1 billion bank is one degree of separation." Well, it takes Eye On Miami to explain exactly how that one degree of separation works in this case, and none of it is explained for readers in the Herald article.

The bottom line, here, is the Herald is promoting a bank sale constructed around walking away from $50 million in US taxpayer money. The $50 million walked away through the bank created by lobbyists and the local representatives of the Growth Machine: Sergio Pino and Ramon Rasco. Pino built a bank to match his ambitions for US Century Homes, dreamt to be the local version of Lennar: the soup to nuts Miami-based homebuilder. Oh, I forgot. According to the Herald, $5 million is to be repaid by the new investors who -- one way or another -- comprise a syndicate of the Great Destroyers.

Irony scarcely covers the issue, on a weekend commemorating the Herald as its 1 Herald Plaza site was demolished, thanks to a bottomless pile of money from Asian gamblers. That's where the one degree of separation lies. You won't read it in the Herald.

Genting was only temporarily deterred from its outsized plan to turn Miami into the Las Vegas of Latin America. It will patiently chip away at resistance to gambling until it achieves its aims.

There is plenty of detail, how Genting spreads its money around. The trio involved in the planned US Century Bank takeover -- Rok, Tate, and Perez -- all washed tens of millions for their short term -- like half a year -- investment in the subordinated debt purchased on the property adjacent to the Herald site.

To achieve its grandiose plans, Genting needed the former Omni property and the company needed agents; politically influential insiders to advance its cause; a large enough footprint for its multi-billion investment in Miami gambling.

The Genting money came at the propitious time that Perez was negotiating his name (and contribution) to the Miami Art Museum. Viewing the whole enterprise, it seems a magician trick worthy of Houdini.

It is astonishing that Jorge Perez materialized whole and was not shut down by the banks during the housing bust or otherwise held to account for the condo mess he created on the banks of the Miami River.

There must be teams of bankers grinding their teeth reading how he now appears on the pages of Forbes and America's richest men. I'd like to know what they think of "one degree of separation".

To continue the theme; it is as though US Century Bank founders, Pino and Rasco, in ginning up the worst excesses of the housing boom -- spreading platted subdivisions into wetlands, environmentally sensitive lands, and spinning public policies into carefully crafted hairballs (like the HABDI fiasco, even earlier) -- simply dissolved from the memory bank of the Miami Herald. (To be fair, the Herald never would print those stories in the first place, giving rise to blogs like ours.)

Because of our $50 TARP investment in US Century, the public deserves to know exactly whose loans cratered on the balance sheet of US Century Bank. My guess is that hundreds of millions sits in undeveloped "agricultural" lands outside the Urban Development Boundary waiting for the miracle to come: the extension of sprawl through the agency of Miami Dade Expressway Authority and the expansion of State Road 836. What are the terms of those loans? Have the borrowers -- who may have been directors of US Century Bank -- repaid their mortgage and principal according to legal obligations?

If the federal government allows the takeover of US Century Bank, by Miami insiders, these facts will vanish the same way likely as US Century debt owed to US taxpayers: the largest unpaid TARP obligation in the state of Florida.

US Century Bank: Miami's worst bank vanishes with scarcely a whimper ... by gimleteye

We've written extensively about US Century Bank and its founders, Sergio Pino and Ramon Rasco. Along with the bank's original board of directors -- including Rodney Baretto and Armando Guerra -- the bank was created to fuel the engine of suburban sprawl in Miami-Dade.

In the last 20 years, if you were a civic activist trying to protect neighborhoods and communities from the impacts of sprawl, it is 100 percent certain that the trade associations, lobbyists, and influence-peddling overwhelming your cause was the same political interference and cast of characters who eventually created zero-rated US Century Bank.

It goes without saying that the timing of the announcement of the liquidation of US Century was Labor Day Weekend: the quietest news cycle of the year. It is also ironic that the sale -- to Brazilian investors -- was scheduled for the end of the GOP national convention because US Century Bank directors are closely identified with the Republican elite of Florida, including Marco Rubio and Jeb! Bush. That the causes and effects of the economic crisis are so blatantly masked by the same characters who created America's dire straits is exemplified by the failure to expose US Century Bank for its role in spreading economic woe throughout the suburbs of Miami-Dade, often into farmland and wetlands edging the Everglades.

Anyhow, EOM will continue blogging about the bank that attracted the attention of the national media as "the most undercapitalized bank in the nation", "the largest recipient of TARP bail out funds in Florida", and the "insider piggy bank" with an obscenely high rate of loans to insiders compared to its national peer group. It appears there may be a story of similar interest surrounding the investors who bailed out US Century and its shareholders (ensuring that details in the public interest may never be released to the public.)

Readers, if you have information on US Century Bank please contact us at our email addresses. There are more chapters to the US Century story. For example, we have heard that during the housing boom years, if you were a county employee and needed a mortgage, that there was a special contact at US Century Bank you could call for a quick, low documentation home mortgage. We would like to interview people who have direct experience along this and other lines to help document (because The Miami Herald and mainstream press, won't) one of the foulest examples of Miami-Dade's snatch-and-grab political culture.

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."

US Century Bank-- sheltering top Republican campaign contributors-- takes Fed handout... by gimetleye

There is a whole nation of consumers anxiously clamping shut their wallets and pocketbooks and taking in news of an economic "recovery" with anger mixed with disdain. This recession-- if that description holds-- is unparalleled in living memory except for the Depression; a point in time only available for senior citizens. Most believe it is not over by a long shot. But venting at the Obama White House or the Democratic Congress is as misplaced as trust by consumers during the boom that the average home could stand as a speculative asset. If citizens want to lash out, better to aim where the speculation began: corporate behavior where Wall Street greed meshed with ambitions of local lobbyists and politicians; all gears in a machine that used regulations as fuel and burned a hole straight through your wallets and pocketbooks.

For the most part, this was a Republican enterprise. It was founded in the idea that the self-interest of business executives would do a better job of protecting free markets than regulations. To be fair, Democrats in the Clinton administration bowed to the pressure from the right; on Wall Street, in Florida and in the wild, wild West. We see, today, how poorly this plan turned out.

US Century Bank is the homegrown lobbying force, big campaign contributors to Republican candidates and causes, whose board of directors includes top speculators in suburban sprawl. Sprawl-- that is to say, production housing in ring suburbs produced by large corporations like Lennar and the supply chain of the Latin Builders Association, the South Florida Builders, and the National Association of Homebuilders-- was advertised as "what the market wants". It enforced this hegemony through local political campaigns. Its champions, like Natacha Seijas, Pepe Diaz, and Joe Martinez, remain unscathed in permanent incumbencies at County Hall. The shareholders of US Century Bank and other local developers grew very wealthy during the housing boom, contributing to every effort to knock down barriers to growth: regulations like the Urban Development Boundary and local enforcement of environmental rules related to wetlands, rock mining, and roads like Krome Avenue, the western edge of Miami-Dade.

It turns out that sprawl wasn't at all what the market wanted. The naked economic pain that has put fully half of all South Florida home mortgages underwater delivered profits during the boom in predictable, large lumps based on marrying financial derivatives to speculative fever. There was no way to stop it. (Former top Bush fund raiser, developer Al Hoffman famously told the Washington Post of suburban sprawl, "It is an unstoppable force!") Civic activists, rules and regulations: all were steamrollered by activities of the banks and homebuilders that passed as "free enterprise" and the exercise of democracy.

The key organizers of US Century Bank have withdrawn from public view. The lobbyist corps has whittled down, too, by the recession. But politics goes on. Accepting bailout money from US taxpayers is a key point of contention separating Republican challengers for US Senate vacated by Mel Martinez: Miami-Dade's Marco Rubio, former House Speaker, and Gov. Charlie Crist. News that US Century Bank has recently accepted $50 million in "fresh capital" must trouble Rubio, whose contributors include Century Directors Jose Cancela and Sergio Pino. Director Rodney Barretto supports Charlie Crist who supported and signed into law measures that deeply push Florida further into the pockets of land speculators. Candidate Rubio must wonder; what does a local boy have to do to cut a break with the development industry he served so well as House Speaker, carrying the torch?

The problem with the political platform that wraps US Century Bank with the fortunes of Florida's Growth Machine is that the way out of this economic mess is the same way in. After two years of a horrendous economy, consumers and voters both should know the difference.


Posted on Sat, Aug. 08, 2009
Bank gets TARP funds

BY MARTHA BRANNIGAN
mbrannigan@MiamiHerald.com

U.S. Century Bank received $50.2 million in fresh capital from the U.S. Treasury's TARP program Friday, positioning the Doral-based commercial bank to expand its lending to local businesses. ``This additional capital will enable us to maintain our strong capital position, continue our course of profitable growth and meet the loan demand from quality business borrowers in our community,'' Octavio Hernández, vice chairman, president and CEO, said in a statement.
Century said its TARP application was approved in January, but the bank, which already had the financial muscle to be termed ``well capitalized,'' wanted to evaluate whether to accept the federal government's investment.

``We wanted to study it very diligently, because it does come with restrictions,'' said Sam Milne, U.S. Century's first executive vice president and chief financial officer.

The bank's leadership decided to embrace the infusion under TARP, the federal government's Troubled Asset Relief Program.

``It gives us an opportunity to grow the bank and continue to lend,'' Milne said. ``Last quarter, loans grew by more than $110 million.''

Milne said the bank had to obtain shareholder approval in late May to amend its articles of incorporation to permit it to issue preferred stock, the form of the federal government's investment. The board of directors gave the final go-ahead at its last board meeting in mid-July, Milne said.

``This gives them a war chest to do a lot of things,'' said Ken Thomas, an independent Miami-based bank analyst.

``They can continue to do a lot of lending. So many banks today aren't lending.''

U.S. Century was founded in 2002 by a group of Miami businessmen, including Sergio Pino, president of Century Homebuilders, who is on its board.

The bank, which has assets of $1.8 billion, has 24 branches and expects to open another in Doral before year end.

It posted earnings of $110,000 for the second quarter and $195,000 for the six months.

Nonperforming loans were 6.32 percent of total loans on June 30. ``We're doing better than most banks,'' Milne said.

``We still have more [troubled loans] than we want.''



© 2009 Miami Herald Media Company. All Rights Reserved.
http://www.miamiherald.com

US Century Bank Collapse: Biggest Business Story of 2012

No surprise that The Miami Herald missed, in its annual review, the biggest business story of 2012: the collapse of the insider piggy bank, US Century Bank.

Eyeonmiami, the blog, documented the hijacking of local government during the early 2000's by insiders who comprised the founders and board of US Century; Sergio Pino and Ramon Rasco. The same forces that planned the transformation of the Homstead Air Force Base into a major commercial airport through a no-bid 99 year lease in the mid 1990's materialized, in the early 2000's to proliferate zero lot line housing and platted subdivisions into Miami suburbs.

Directors like Rodney Barreto, a top Jeb! Bush consigliere, agitated for widening Krome Avenue while amassing large land holdings outside the Urban Development Boundary. It was a near perfect and completely legal scheme: manipulating zoning to arbitrage the value of farmland and open space into its conversion value as sprawl.

The media dared not acknowledge much less criticize the formula because its own revenues and profits, benefiting top executives, were tied to what even then looked like, walked like, and talked like a Ponzi scheme of gargantuan proportions.

US Century Bank provided not just the link between politically connected home builders and the local elected officials who did their bidding from the dais of the county commission, like former county commissioner and ring leader Natacha Seijas, they also provided the financing under the lazy eye of regulatory agencies.

The housing boom and subsequent crash caused the worst economic crisis since the Great Depression. On a broad scale, the Great Recession that followed -- if it can be called that -- was not a blameless exercise. The same way at the national level none have been held to account, at the local level the principal actors have gone unmentioned from the scene. The general lassitude of the South Florida economy traces directly to the shattered fortunes of consumers persuaded to invest in mortgages they could not reasonably afford, through the promotion and advocacy of homebuilders and their bankers -- like US Century -- and the politicians who made their developments possible through zoning decisions.

Eventually US Century Bank received the largest TARP federal taxpayer bailout in Florida; even this fact was lightly reported by the mainstream press. Yet, because of its rotten loan portfolio (according to Bauer Financial, a ratings agency, US Century Bank had a ratio of insider loans that dwarfed similarly sized banks in the United States) it also ranked as the most undercapitalized bank in the United States (South Florida Daily Business Journal).

If one were to overlay on a map of Miami-Dade County, those rotten mortgages from US Century Bank, it is our belief the map would provide an outline of the pattern of suburban sprawl that has been so destructive of quality of life and sound decision-making for taxpayer investments by elected officials who voters keep returning to office, mostly because voters are uninformed about the insider forces that shape our communities.

For these reasons, the collapse of US Century Bank -- yet to be shuttered by regulators or, through lawsuits, fully disclosed -- is the biggest business story of 2012 in Miami.

Natacha Seijas, US Century Bank: top supporters, going down with the ship ... by gimleteye

County commissioner Natacha Seijas, facing a recall election next week in Hialeah, represents the land speculators and developers whose greed and determination to turn every last square acre of the county into suburban sprawl symbolizes the poverty of imagination that is a hallmark of South Florida. The political forces in Miami Dade who championed sprawl-- leading by force of campaign contributions that shut out all opposition-- center around the Latin Builders Association and its directors.

Seijas, in a recent public opinion poll, likely to face defeat by an angry electorate next week. What is not clear, and has never been clear to the electorate, is the extent to which Seijas stands for the influence peddling and horrendous politics that came to full expression through suburban sprawl. Seijas' approval ratings are at rock bottom, but so are her supporters and their business lines that depended on massive infusion of capital to service debt loads built on land speculation. Take her top supporters for example; Century Homes and US Century Bank.

Sergio Pino, Ramon Rasco, Jose Cancela, Augustin Herran: the founders and directors of US Century Bank had a simple purpose: to extend the empire of suburban sprawl to the Everglades in Miami-Dade, using up every buildable acre. They are among the biggest land speculators, as individual investors, outside the Urban Development Boundary (projects like Parkland) where they are still at work, hand in glove with Lennar and other publicly held companies, to push sprawl into farmland. They are omnipresent at County Hall where their political influence deformed the entire purpose of local government during the run up to the biggest housing boom and then crash in Florida history-- miming the economic fortunes of the nation--, turning the county zoning department into an embattled and stressed hothouse where planners either grew skin thick as a rino's or found another place to work.

Seijas and staff including Terry Murphy played the central role in shaping the accommodation of power, money and authority in government to the needs and preferences of the builders and bankers. In the case of the Homestead Air Force Base fiasco, tens of millions of dollars and nearly a decade deformed the focus of local government to serve their plans. Wasted. The subsidiary effect of so much lobbying was to degrade every other effort to protect Miami Dade's quality of life and environment. For example, there was nothing coincidental about the M-D Police Department looting the environmental fund, millions of dollars cobbled together from fines collected by polluters. Snatch and grab has been the entire culture of county government, with its corner markers set down in clear scents on the playing field by the big dogs. Yes, Ramon Rasco and the HABDI investors were about aviation and how to maximize private profit, but the real play in Homestead was for suburban sprawl: to make billions by putting tens of thousands of newcomers into crappy subdivisions in South Dade, the Redland and West Dade.

US Century Bank was at the forefront: a homegrown bank to serve the mortgage needs of sprawl. Like Seijas, the bank is rated zero today. The latest report by Bauer Financial has some astounding statistics: in the quarter ended Sept 30, 2010, loans to insiders as a percentage of total networth was 62%, or eighty percent higher than its peer group. Partly, as a result, Bauer rated US Century with a single star, representing a "troubled bank" rating. In the latest quarter, as of Dec 31, 2010, that ratio -- of insider loans to total net worth, soared to 76%, or ninety three percent higher than its peers. The bank has four times the amount of nonperforming assets compared to its peer group and ten times the value of repossessed assets-- essentially sprawl waiting for the next crop of gullible buyers-- to its net worth. Although the Bauer report notes that the bank is "adequately capitalized", US Century is one of the financial system's walking dead: alive thanks to the generosity of the Federal Reserve, propping up speculators who continue to influence local, state and national politics.

In the end, the piggy bank serving Natacha Seijas will be absorbed by another investor-- a bank too big to fail perhaps, or a financial engineer who wipes out shareholders for pennies on the dollar in order to start afresh on the game of sprawl with a clean slate. Like BankUnited, US Century will have great memories of hosting basketball stadiums, fundraisers for Republican candidates and Chamber of Commerce luncheons, where everyone nodded in unison what a swell thing it is to take wetlands and turn them into something profitable, what wonders the "free market" is compared to Havana or Managua or Caracas. US Century will go the way of the dodo, the bird that couldn't fly. Its assets will be scavenged while the politicians who supported all those shifted costs to taxpayers and voters will retire to Ocala, cashing in their undeclared gambling chips or foreign corporate ownership of condos in the Bahamas or Panama. They will sink from sight to be recovered at a fraction of their original worth, like the 73 foot Donzi that sunk this week in Gables Estates and salvaged. It is called, "Century Star", and if its walls could speak who knows what else we would learn about these years when our options shrank to the size of a inflatable dinghy.

Type the rest of the post here

US Century Bank: why would anyone invest now? by gimleteye

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

Enlarge Image

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.