The Office of the Comptroller of the Currency is looking to crack down on a bank holding company that is dealing with underwater securities.
The agency said it is seeking cease-and-desist orders against three units of Industry Bancshares in Industry, Texas – First National Bank of Shiner, Bank of Brenham and First National Bank of Bellville.
The OCC alleges that “that each bank engaged in 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 OCC’s unusually public effort comes after the $4.7 billion-asset company’s executives refused to sign off on the agency’s enforcement action.
Industry said in a statement to American Banker that the agreements “would cause more harm than good” and are unnecessary because it is working “tirelessly to address” its financial position.