Camco Financial (CAFI) said its Advantage Bank has been released from a 2012 enforcement action less than a month after agreeing to sell itself to Huntington Bancshares (HBAN) in Columbus, Ohio.
The $756 million-asset Advantage had been operating under a consent order from the Federal Deposit Insurance Corp. and state regulators, according to a Friday press release. The bank was ordered to review and update management and compensation structures, increase board oversight, boost capital and refrain from lending to troubled borrowers.
The bank was also required to clean up its loan portfolio, reduce interest rate risk, develop strategic and profit plans, maintain an adequate allowance for loan and lease losses and prepare a strategic plan for information technology staffing, project management and investment.
"We are extremely pleased to have the consent order terminated following four years of hard work to restore Advantage Bank to a sound financial position while also pursuing our long-term growth strategy," James Huston, Camco's president and chief executive, said in the press release. "The significant progress that has been achieved during this period reflects the strong support we have received from employees, customers and shareholders. We can now move forward with increased confidence."
Advantage will continue submitting certain plans and reports to the FDIC and Ohio regulators, according to the release. It will also seek regulatory approval before issuing any dividends to Camco and maintain a minimum Tier 1 leverage ratio of 8.5% and a total risk-based capital ratio of at least 12%. The bank had an 8.9% Tier 1 leverage ratio and a 12.9% total risk-based capital ratio as of Sept. 30.
In October, Camco Financial agreed to sell itself to the $56 billion-asset Huntington. Huntington will pay $97 million in cash and stock in the deal, which is expected to close in the first half of 2014.