US Fed bans dividends, debt issues at OptimumBank

WASHINGTON, June 29 Tue Jun 29, 2010 11:00am EDT

WASHINGTON, June 29 (Reuters) - The Federal Reserve Board said on Tuesday it has prohibited OptimumBank Holdings Inc (OPHC.O) of Fort Lauderdale, Florida, from paying dividends or taking on new debt without written approval from the Federal Reserve Bank of Atlanta.

In a written agreement with the Atlanta Fed, the firm agreed to take steps to utilize its financial and managerial resources fully to "serve as a source of strength" to its banking subsidiary, OptimumBank, of Plantation, Florida. It also agreed to ensure that it complies with consent orders with the Federal Deposit Insurance Corp and the Florida Office of Financial Regulation issued in April.

The Fed regularly publishes such written agreements with bank holding companies to ensure their safety and soundness, but does not state specific reasons for the remedial actions it orders.

OptimumBank in April restated its results for 2009, increasing its after-tax loss for the year to $11.48 million from $8.48 million stated previously. The company attributed the increase to a $1.3 million increase in its loan loss prevision, resulting in a new assessment of its loan portfolio at year end, coupled with a $1.6 million decrease in tax benefits.

The company had $272.8 million in assets at year-end and three banking branches in Broward County, Florida. (Reporting by David Lawder; Editing by Dan Grebler)

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