Friday, August 1, 2014

CertusBank losses more than double

Troubled CertusBank more than doubled its losses in the second quarter compared with the same period a year ago, a worsening it attributed to expenses stemming from restructuring under its interim CEO.

John Poelker was appointed interim CEO and president of the Greenville, S.C.-based bank earlier this year after its top executives were fired as the bank battled rising losses and shareholder questions over expenses.

Certus posted a loss of $15 million in the second quarter, up from a loss of $7.1 million in the same period last year and a loss of $9 million in the first quarter, according to Federal Deposit Insurance Corp. data released this week.

In a statement, the bank said restructuring efforts -- including the exiting of certain businesses, downsizing and "fine-tuning" core operations -- resulted in second-quarter expenses that are expected to be non-recurring. The statement also said Certus is realigning its focus to a more traditional community banking model.

The bank, whose headquarters were once in Charlotte, continues to deal with legal and public relations headaches in the wake of the firings of its executives. On Thursday, former presidents of the Greenville branch of the NAACP held a press conference about the firings and what they described as a business community in Greenville that does not offer adequate opportunities for blacks.
   
The executives sued the bank in April, alleging a hedge fund manager convinced a majority of the bank's board members to fire them. The executives -- Walter Davis, Milton Jones and Angela Webb, all of whom are black -- claim the hedge fund manager, Benjamin Weinger, set out on a campaign to defame them with racial statements.

Certus maintains that the decision to fire the executives was based on a review of their performance at the bank. In a statement, the bank said it lost confidence in the executives' ability to effectively manage the bank's operations and that the firings had nothing to do with race.

The lawsuit is pending in federal court in Greenville.

The firings came after shareholders expressed worries about what they perceived as exorbitant expenses for a bank that posted large losses each quarter. A letter from Weinger to shareholders cited millions of dollars spent on, among other things, private jet flights, Carolina Panthers tickets and flashy technology at the bank's headquarters.

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