One Bank & Trust Under New Regulatory Agreement

Little Rock-based financial institution One Bank & Trust is under new regulatory supervision from the Office of the Comptroller of the Currency (OCC).

On May 23, 2012, federal banking regulators replaced a previous consent agreement with a “Stipulation and Consent” order that outlines stringent guidelines for the bank to follow.

One Bank, or OneBanc as it is branded, accepted the OCC consent order, but did not respond to a request for an interview with Talk Business.

The new consent order, which you can read here, calls for the bank to maintain the following minimum capital ratios:

• Total capital at least equal to 12% of risk-weighted assets
• Tier 1 capital at least equal to 8% of adjusted total assets

“If the Bank fails to maintain the capital ratios required by paragraph 1 of this Article, violates paragraphs 3, or fails to implement a Capital Plan to which the Director has provided a written no supervisory objection, then the Bank may, in the Director’s sole discretion, be deemed undercapitalized for purposes of this Order,” the order reads.

Additionally, the OCC order calls for:

• A compliance committee and a three-year strategic plan to deal with the OCC's concerns.
• A review of board management and a review of corporate governance and decision-making processes.
• An improvement in the bank's loan portfolio management and identification of problem loans.
• Limits on extending credit, renewals, modifications or extensions to borrowers whose loans have been criticized by bank examiners.
• A list and game plan for dealing with loans lacking complete credit and collateral information.
• Adoption by the board of a real estate appraisal and evaluation process.
• An independent audit committee that would include a majority of members without employment or family ties to the bank.

When the bank was under its previous order, which began in January 2011, bank chairman and CEO Layton Stuart said, “Entering into the Agreement in no way endangers depositors and will have no impact on customers. We are fundamentally sound. We are liquid, with money to lend and a stronger balance sheet, having posted net profits of $1.3 million in the year just ended (2010).”

Stuart said the bank's asset quality had been “adversely impacted” by economic conditions in its primary lending market in central Arkansas.