Priority Bank of Ozark Nearing End of Dispute with Fed

by George Waldon  on Monday, Dec. 3, 2012 12:00 am  

The thrift recorded a $1.3 million profit through the first nine months of 2012. That includes a $372,000 profit during the third quarter.

The ombudsman upheld the OCC findings regarding Priority’s composite CAMELS score of 3, which was based on “less than satisfactory ratings in asset quality, management and liquidity.”

The Ombudsman also upheld the OCC findings regarding Priority’s downgraded Liquidity rating of 3 and “troubled condition” designation.

“Liquidity risk at this examination was high and increasing,” the OCC reported. “The bank continued to heavily rely on Federal Home Loan Bank advances for liquidity funding purposes.”

The amended notice of charges for an order to cease and desist includes some stilted language regarding alleged unsafe or unsound practices and violations of law, rule or regulation.

The OCC initially charged that Priority Bank “has engaged” in those practices and violations. That was modified to a more sweeping qualifier: “is engaging or has engaged, and/or the OCC has reasonable cause to believe the bank is about to engage.”

The OCC’s amended filing contains the same 14 matters requiring attention detailed in its initial document.

That list includes inadequate: credit risk management, residential loan underwriting, criticized assets management, loan portfolio management, problem loan identification and loan review, capital planning, allowance for loan and lease losses methodology, other real estate loan accounting, concentration risk management and controls over affiliate and insider transactions.



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