New One Bank CEO Jerry Pavlas Rebuilds Brand, Braces for 'More Bad News'

by George Waldon  on Monday, Jan. 14, 2013 12:00 am  

Jerry Pavlas, president and CEO of One Bank & Trust, is part of the evolving board of directors at the $454 million-asset lender. (Photo by Michael Pirnique)

The $10.6 million write-off of bank-owned life insurance during the Sept. 30 reporting period was listed under the heading of “cumulative effect of changes in accounting principles and corrections of material accounting errors.”

Pavlas said One Bank’s profits would be battered a little more during the fourth quarter as order is restored to its financial statements.

“We’re going to get the balance sheet of the bank to be of very high integrity, so we have a lot of work to do to reflect where the bank is,” he said. “We have a few more adjustments in the accounting area.

“There will be more bad news from what’s happened in the past. It’s not so much financial though.”

Pavlas is alluding to possible civil litigation or criminal charges that might arise from the ongoing forensic audit of the bank books ordered by the OCC.

“We’re going through a forensic audit, so that has some other implications,” said Berry, the board chairman. “This is the first time I’ve been through this process.

“After the forensic audit is completed, a formal written report will be in our hands. Federal authorities will determine what those findings will warrant.”

Although the bank is operating under a renewed supervisory agreement, Berry said he believed things were on track to cure a laundry list of management and compliance shortcomings identified by federal regulators and return to business as usual.

The mood changed dramatically after an OCC review of One Bank’s financial records during the third quarter last year.

“We thought we were making progress,” Berry said. “I don’t know what happened, what the OCC learned to cause them to become so aroused. I can guess, but I don’t know.”

Berry was stunned when the OCC charged the board of directors with stripping Stuart of his positions with the bank and firing him from the company he owns.

“I have a long personal relationship with him,” Berry said. “This has been a painful process. None of us expected the events of Sept. 28.

 

 

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