Century Bank hits another hurdle

Sarasota-based Century Bank has been dealt another blow in its yearlong battle to survive the recession.

The latest punch: The federal Office of Thrift Supervision, the bank's primary regulator, filed a Prompt Corrective Action Directive against the institution — lingo for what some in the industry refer to as a near-death sentence. The directive, issued Oct. 22, orders the bank to reach a merger, acquisition or a sale agreement by Nov. 1.

If such an agreement isn't in place by then, the OTS could, and likely will, take over the bank. That would result in the Federal Deposit Insurance Corp. selling off the bank's assets and deposits.

John O'Neil, Century's president and chief executive, couldn't be reached for comment.

The bank's issues, as pointed out several times in the OTS order, revolve around nonperforming loans with insufficient capital in reserves. The bank had $142.2 million in sour loans at the end of the second quarter — 20% of its total portfolio.

Century, which has nine branches, eight of which are in the Sarasota-Bradenton area, had $847 million in assets as of June 30.

The OTS filed an “unsafe and unsound” order against Century March 11. That filing criticized the bank for being too aggressive in its loan strategy and too lax in its risk management — a combination that led the bank to lose $21 million in 2008.

O'Neil contested parts of that order, saying at the time that the bank's problems were based on external economic forces, not internal operations issues.