Two years ago, U.S. Century Bank earned the distinction asthe bank with more insider deals than any other banking institution in Florida
. Several U.S. Century board members and executives accounted for $110 million in insider loans at a bank with deposits of $1.5 billion in 2009.
One of those insiders included bank founder, prominent Republican Party fundraiser, and mega-developer Sergio Pino, who earlier this year resigned from the bank's board of directors. Now federal banking regulators are demanding U.S. Century's board members scrutinize possible conflicts of interest involving insider deals more carefully.
In June, the Federal Deposit Insurance Corporation ordered the bank to comply with a host of reforms aimed at salvaging U.S. Century, which has reported $134 million in losses the past two-and-a-half years. In 2009, the bank received $50 million in federal TARP funds, one of the largest disbursements to a Florida banking institution.
U.S. Century has 90 days from June 7 to assemble a new qualified management team, charge-off bad loans, and prepare a strategic plan for bank operations, among other fixes.
With respect to insider loans, the FDIC is requiring the bank to implement "written policies and procedures designed to bring to the attention of each [board member] conflicts of interest that may exist in approving loans or other transactions in which officers, directors, or principal shareholders are involved...The results of any deliberations by the Board regarding potential conflicts shall be reflected in the minutes of its meetings."
In a written statement to The Miami Herald, U.S. Century Vice Chairman, President and Chief Executive Octavio Hernandez said that the bank would comply with the FDIC's enforcement order.
If you like this story, consider signing up for our email newsletters.
SHOW ME HOW
You have successfully signed up for your selected newsletter(s) - please keep an eye on your mailbox, we're movin' in!