A second director at the troubled Atlantic Coast Financial (ACFC) has resigned due to concerns about how the Jacksonville, Fla., company is run.
Charles R. Carey, who joined the board in February, wrote in his resignation letter dated June 2 that "in the limited time I have served on the board it has become apparent to me that, given the events that have transpired, and current circumstances at ACFC, I will be unable to effectively serve as a board member."
Jay Sidhu resigned in April as chairman of Atlantic Coast, citing that the company failed to "mitigate or significantly reduce risks facing the bank." He will remain on the board through the end of his term in 2014 but will not seek reelection.
Carey wrote in the letter filed with the Securities and Exchange Commission that governance, business planning and execution and teamwork concerns led to his resignation, which is effective immediately. He said that management has failed to present a "credible business plan" to the board and that the "polarization of board members" and "contentious nature of interactions among directors" interfered with management's objectives.
The $779 million-asset Atlantic Coast responded to Carey's claims in an SEC filing of its own Thursday. It said that the polarization Carey referenced is "a result of the views and actions of certain members" and that "the majority of the board of directors believes the company is taking appropriate actions to explore all strategic alternatives to enhance stockholder value."
The bank also said that it operates under a business and capital plan that was approved by federal regulators and that management and the executive committee had met in April to discuss strategies to incorporate into a revised one. The revised plan will be reviewed by the board this month.
Atlantic Coast has lost money in 15 consecutive quarters and is operating under an agreement to maintain a Tier 1 core capital ratio of 7%. At March 31, its core capital leverage ratio was 5.71%. It also has hired an investment bank to explore its options, including a possible sale or capital raise.
The Jacksonville Business Journal first reported Carey's resignation.