Jeff Bank Moves Under OCC Supervision

Jeff Bank has completed its conversion from a New York state charter to a national bank charter, transferring its primary supervision to the Office of the Comptroller of the Currency.

The change became effective on September 1. Formally renamed Jeff Bank, National Association, it will continue to use the trade name Jeff Bank.

The conversion has also made the community lender a member of the Federal Reserve System. The Federal Reserve Board will continue to supervise parent company Jeffersonville Bancorp.

The bank said the conversion would not change the terms of customers’ loans or deposit accounts or significantly affect its existing activities or investments.

The OCC will now lead the bank’s supervision and examinations, replacing separate state and federal oversight.

The OCC is an independent bureau of the US Department of the Treasury responsible for chartering, regulating and supervising national banks.

George Kinne Jr., president and chief executive, said the bank’s pre-conversion examination experience indicated that OCC oversight would be similar to its previous regulatory arrangements but would eliminate duplicated work.

Federal law can preempt certain state requirements for national banks. Jeff Bank said it expects the national charter to improve its competitive position because its branch network borders two other states.

The bank operates 10 full-service branches across Sullivan and Orange counties in New York.

The conversion comes after Jeffersonville Bancorp reported second-quarter net income of $3.34m, compared with $3.29m a year earlier. Loan interest and fee income increased by $349,000, although its provision for credit losses rose by $138,000 because of growth in the loan portfolio.

The conversion does not introduce new products or alter the bank’s branch network, making its immediate significance regulatory rather than customer-facing.