BANK OF BRENHAM: OCC CHARGES ARE ‘GOVERNMENT OVERREACH’
Bank of Brenham is one of three regional banks that are contesting a notice of charges issued by the Office of the Comptroller of the Currency (OCC).
On January 17th, the OCC filed notices seeking cease and desist orders against three subsidiary banks of Industry Bancshares: Bank of Brenham, First National Bank of Bellville and First National Bank of Shiner.
The cease and desist orders pertain to what the OCC called “unsafe or unsound practices relating to an investment strategy concentrated in long-term securities that exposed each bank to excessive interest rate risk without sufficient sources of contingency funding and contingency capital, and that each bank failed to timely mitigate such risk.” The notices claim that the three banks are in “less than satisfactory” and “troubled” condition.
A statement from Industry Bancshares reads that the boards of directors for all three banks named voted unanimously not to sign formal agreements requested by the OCC, who then proceeded with the notices of charges. The agreements, according to the statement, did not outline any remedial actions that the banks “were not already undertaking and making progress on to address.”
Industry Bancshares said those remedial actions included a capital raise intended to reposition its subsidiary banks’ balance sheets to be “safer and stronger institutions.” The firm said it “fully cooperated” with the OCC in an attempt to find a fair path forward.
The statement claimed that while an acceptable compromise for both properties is usually found, in this instance, the OCC “went from very little or zero scrutiny to a formal enforcement action in a very short time.” It stated that the agreements requested by the OCC do not advance the principles designed to protect the best interests of customers and consistent best practices. Further, it called the OCC’s action “an unfortunate example of regulatory overreach.”
Bank of Brenham President Gary Durrenberger said the bank is “vigorously” fighting the charges presented by the OCC. He said the bank appreciates the local support of those it serves and will continue to be engaged in the community.
Jim Kruse of Industry Bancshares said its banks have done all that the OCC has asked them to do in the past, the banks are “safe and sound,” and that “no one is shutting our doors.” He said they are striving to do what is best for community banks, adding, “We’re fighting government overreach that has come to small-town America.”
According to the notices, a hearing will be held on a date to be determined before a federal judge in the Southern District of Texas regarding the charges brought forth.
This quote from the OCC is very concerning ” Earnings are insufficient to support operations, maintain appropriate capital
and allowance levels, and support the Bank’s high-risk profile.” If their earnings are insufficient to support operations, where exactly is the money coming from? If I had money in this bank that was above the FDIC insured limit, I would be carefully considering whether to leave it at BoB or whether to move it. Just my humble opinion.
I think that Industry Bancshares made a stupid mistake investing so much in government bonds. It should have known that interest rates would go up, causing the value of the bonds to go down. However, the Feds oversee that and knew that too. They had no problem with it all this time even as interest rates were going up. They went from zero oversight to enforcement action very quickly. In addition, many larger banks are in the same boat, and they have not done this to them. It seems they go for the smaller fish first. If the Fed’s job is to protect us and our banking system, they are doing a poor job by letting things get bad and then taking enforcement action against the smallest banks first.
What makes you think they will take enforcement action against larger banks at all?
For a pecking order, see “INSURED U.S.-CHARTERED COMMERCIAL BANKS THAT HAVE CONSOLIDATED ASSETS
of $300 MILLION or MORE, RANKED by CONSOLIDATED ASSETS
As of September 30, 2023” BoB is between half and 2/3rds down the list of 2,200 banks in the category that the Fed send its, hot off the press, money to.
The Feds job is to protect big business and wall street and the wealthy. As well they should since everyone has a 401k retirement, life or death, is now tied to health of the market. Those pensions and unions of the greatest generation were just so easy on the working class that working class needed to be convinced they were bad and job offshoring and support of illegal immigration for slave wages good. Programs like NAFTA.
Look no further than QE if you want evidence and who or what the fed prioritizes.
The OCC is usually quite conservative in their oversight. If they think Industry has a problem, they probably do. Industry can call it “government overreach that has come to small-town America”, but the truth is, there must be something going on.
As long as you have less than the FDIC limit ($250,000), you have nothing to worry about.
Question do we have a Texas State OCC ? If so What is their position? If we do not have a state OCC. I personally think Texas needs to have their own currency backed by gold and ditch the federal Reserve all together cause all they do is print funny money. So everyone needs to support the local banks with this fight.
Industry is a federally chartered bank, so the Feds have oversight, not any state org. If Texas had its own currency, we couldn’t do business with the rest of the US, no one would accept it.
I sorry but who doesn’t accept gold backed currency? In fact the clowns on Wall street are using our retirement money to make us bend a knee right now. Again thank you bank board for calling it like you see it just because so FED implies something does not make it anything in fact just the opposite. Well behaved people make good slaves.
What, precisely, is the financial condition of Bank of Brenham? Knowing that, we can judge for ourselves whether this is an example of government overreach or prudent oversight.
Anyone can visit the regulatory agency websites like OCC.gov and do a search of their financial institutions for some data. You can also search call reports and other financial data by visiting https://banks.data.fdic.gov/bankfind-suite/financialreporting and searching by bank name. For the full cease and desist order against BoB, you can find it here to help you in your judgment: https://www.occ.gov/static/enforcement-actions/eaAA-SO-23-56.pdf
Since you’ve explored the details surrounding the current state of things re Bank of Brenham, do you think it is possible for the bank to overcome this in either the short or long term? Or is it impossible to know?
Sorry the government has taken this step. BoB has served me well and I am staying with it.
I admire your loyalty to BoB but I also hope that you have FDIC protection on every dollar you have there.