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cfsbank taking ‘actions’ following examination

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Charleroi-based cfsbank has entered into an agreement with a federal bureau “to take some actions” related to its operations, the bank’s top executive said.

But Neil Bassi, the president and chief executive officer, downplayed the situation, calling the “actions” part of a “routine examination.”

The first page of the 24-page agreement, acquired by the Observer-Reporter, states that the bank “and the Office of the Comptroller of the Currency … wish to assure the safety and soundness of the Bank and its compliance with laws and regulations.”

OCC is a bureau within the U.S. Department of the Treasury, and is cfsbank’s regulator.

The Comptroller, the agreement continues, “has found unsafe or unsound practice(s), including those relating to commercial credit oversight and administration, internal controls, corporate governance, and violation(s) of law, rule, or regulation, including those relating to conflicts of interest, regulatory reporting, and overdrafts.”

The Pittsburgh Field Office of OCC issued the agreement, dated March 12.

The bank supplied a summary of the supervisory agreement, stating “it is the result of a regulatory examination conducted” by the OCC in October. In it, cfsbank said it agreed to take these actions:

  • Review the bank’s management, including its credit risk management;
  • Prepare a revised strategic plan OCC will accept;
  • Revise policies and procedures “regarding impaired loan identification and the maintenance of an adequate allowance for loan and lease losses”;
  • develop a commercial credit risk management and independent loan review program, and a problem loan workout program for commercial loans; and
  • adopt a revised overdraft policy; conduct an independent third-party review of overdrafts; adopt a comprehensive insider activities and conflicts-of-interest policy; and adopt a revised internal audit program.

In a telephone interview, Bassi called the OCC examination a “general examination. We gave a formal agreement to take some actions.”

He added that the agreement “will have no impact in day-to-day” interactions with customers, and that “our financial condition is the best it’s ever been.”

Bassi said in a statement accompanying that summary that: “The bank’s capital ratios are, and will continue to be, far in excess of all regulatory requirements.”

Until its March 1, 2015, rebranding, cfsbank was known as Charleroi Savings Bank, which was founded in 1936 as a savings and loan. The bank has 10 branches in four counties: Bentleyville, Charleroi, Monongahela, Peters Township, Southpointe and Washington in Washington County; Connellsville in Fayette; Rostraver and Hempfield townships in Westmoreland; and Seven Fields in Butler.

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