After the Obama administration last week announced its plan to overhaul financial regulation, the Office of Thrift Supervision is living on borrowed time.
It's the only one of several bank regulators that would be eliminated as part of an effort to create a new National Bank Supervisor. And the OTS has been criticized by legislators for lax examinations that led to the failure of IndyMac Bancorp Inc. and Washington Mutual Inc.
But the OTS continues to walk its beat and dish out some loan justice, as a small Burlington County savings bank knows full well.
Roebling Bank entered into a supervisory agreement with the OTS on June 17. Under it, the bank can't make nonresidential real estate loans, commercial loans, construction loans, and loans secured by non-owner-occupied residential property.
The subsidiary of Roebling Financial Corp. Inc. also must adopt a plan to reduce its concentrations in a variety of types of loans, including non-residential real estate.
The restrictions were imposed in response to "concerns raised by the Bank's most recent" examination by the OTS, Roebling said in a filing with the Securities and Exchange Commission.
Roebling, with five offices in Burlington County, had total assets of $171.9 million as of March 31. In its most recent financial statements, the bank noted that non-performing loans were $5.9 million, or 4.85 percent of total loans as of March 31. That was a big increase from the $922,000, or 0.83 percent, as of Sept. 30.
According to a note in the financial statements, about $4.7 million of the increase was attributable to four loans, including a $1.7 million participation in a condominium construction loan that was considered delinquent.
A phone call yesterday to Roebling Bank CEO Frank J. Travea III was not returned.
Roebling is not the only South Jersey bank operating under a supervisory agreement. Delanco Federal Savings Bank has been doing just that since Dec. 17, 2007.
Under that agreement, Delanco agreed to refrain from making, investing in, purchasing, or modifying any commercial loan without the prior OK by the OTS.
All supervisory agreements remain in effect until the OTS chooses to modify, suspend, or terminate them.