Clark Street Capital has spent the last few years helping struggling banks shed problem assets. Now it wants to help banks comply with enforcement actions.
The Chicago advisory firm has launched Bank Management 360, a service that conducts management studies, one of the more common components of enforcement actions. It has hired Karl Ostby, a board member of Clark Street and a former president and chief executive officer of Southport Bank in Kenosha, Wis., to oversee the division.
Ostby has firsthand experience dealing with regulators. He announced his departure from Southport in 2008, but stayed an additional six months to assist new management in the transition. During that time, the bank received a cease-and-desist order from the Federal Deposit Insurance Corp. The $304 million-asset Southport remains under an order and was undercapitalized at June 30.
Does that order undercut his credibility? He says it helps.
"It's the full experience of my time at Southport - starting it in 1997, growing the organization, announcing my departure and then working with new management on a new direction during the transition - that helps make me uniquely qualified to counsel banks now facing regulatory orders," Ostby said in an email.
Ostby said in an interview that the Bank Management group already has a handful of clients and that he has met with regulators to discuss what they are looking for when they order management studies. The studies, Ostby said, will be tailored to each institution, but will start by interviewing senior management and the board to determine strengths and weaknesses as well as assessing processes and procedures.
