Two South Florida banks were slapped with regulatory enforcement actions in May, among 53 banks nationwide, the Federal Deposit Insurance Corp. announced on Friday.
First Bank of Miami, based in Coral Gables, and Dania Beach-based Community Bank of Broward each agreed to consent orders, without admitting or denying charges of unsound banking practices or violations of law or regulation. They are among dozens of Florida banks that remain under regulatory action.
First Bank of Miami’s 33-page order cites such issues as asset quality, management effectiveness, earnings, capital, and sensitivity to market risk, in addition to compliance with the Bank Secrecy Act.
Ken Thomas, a Miami-based economist and independent banking consultant, called the order an “8” on his “Enforcement Action Richter Scale,” saying he has “not seen one so long or strong in some time.”
The enforcement action is the first for First Bank of Miami, founded in 1996, said President and Vice Chairman of the Board Jorge Triay. “We’re fully commited to working with our regulators to correct the notice of deficiencies and restore the bank to its previously strong ratings,” Triay said.
The bank is complying with the mandates and timeframes, he said, and has created new board committees, initiated new training, added staff to its Bank Secrecy Act and loan areas, and issued a new strategic plan.
First Bank has five branches, $248 million in assets and 58 employees. The bank posted a $317,000 loss in the first quarter, as it increased its loan loss reserve to reflect deteriorating real estate values, Triay said.
Community Bank of Broward’s 22-page order cites issues of capital adequacy, asset quality, management and earnings sufficiency.
Thomas rated the order a “6” on his “Richter Scale.”
Community Bank of Broward Executive Vice President and Chief Operating Officer Joe Dorsey said the order is the bank’s first, and relates to an audit from September 2011. “We’ve corrected 17 of the19 things they said we they were deficient in, and the other two should self-correct in the next 90 days,” Dorsey said.
Founded in 2002, the bank has $464 million in assets, eight branches and 81 employees. It posted a first-quarter profit of $444,000.