Fraud & Investigations

Updated consent order points to Ocean Bank's 'unsound' practices

Posted on Monday, July 4, 2011

Ocean Bank's latest consent order cites "weaknesses in asset quality, management, earnings, capital, liquidity, sensitivity to market risk, and its Bank Secrecy Act program."
Ocean Bank of Miami has entered into an updated consent order with the Federal Deposit Insurance Corp. that addresses its banking practices.
The latest consent order, which was prepared April 28 by the FDIC and released Friday, cites “unsafe and unsound banking practices” by the bank and “weaknesses in asset quality, management, earnings, capital, liquidity, sensitivity to market risk, and its Bank Secrecy Act program.”
Ocean Bank said it consented to the order without admitting or denying the charges.
The FDIC action replaces a cease-and-desist order brought in 2007 and updated a year later.
The order calls for Ocean Bank’s board to step up its participation and supervision of the bank’s activities. The board had 30 days from April 28 to establish a five-member committee to oversee the bank’s compliance with the latest order.
In a written statement, Ocean Bank president and chief executive officer A. Alfonso Macedo said “while the original order dealt mostly with Bank Secrecy Act issues and the modification focused on lending and credit, the consent order eliminates sections in which the bank has reached compliance and details specific areas that require additional action,” including compliance with anti-money laundering regulations and elevating Tier 1 capital ratio levels.
The bank had 60 days from the order’s issue date to reach a Tier 1 ratio of 8 percent and a risk-based capital ratio of 12 percent. At the end of the first quarter of 2011, its Tier 1 ratio was 5.15 percent and risk-based capital ratio was 9.23 percent.
Ocean Bank is evaluating several strategies to meet the capital requirements, Macedo said, including a potential capital infusion from shareholders or other sources.
Ocean Bank’s Venezuelan parent has historically stepped in with capital as the bank required it. There have been no such infusions in recent quarters.
Ocean Bank returned to profitability in the first quarter of 2011 but has not returned to “well capitalized” status. The institution received zero stars for the second straight quarter in BauerFinancial’s quarterly rating of South Florida lenders.
Eric Kalis, Daily Business Review

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