Herald National Bank, a New York-based full-service commercial bank, has entered into a formal agreement with the US Comptroller of the Currency (OCC) on April 22, 2010.

The formal agreement is based on the results of Herald National Bank’s first formal regulatory examination using the Uniform Financial Institution Rating System (UFIRS) which assigns CAMELS Ratings.

Reportedly, the Herald National Bank is ‘well-capitalized’ at this time, and entry into the agreement has no impact on the bank’s regulatory capital status. In addition, the formal agreement has no impact on the bank’s continued participation in the Transaction Account Guarantee Program (TAGP), which provides unlimited federal deposit insurance for certain non-interest bearing business transaction accounts.

The board of directors and executive management have begun the corrective process called for in the agreement, including the appointment of a compliance committee to oversee compliance by Herald National Bank with the formal agreement and to submit quarterly progress reports to the OCC.

Raymond Nielsen, chairman and CEO at Herald National Bank, said: “We view the agreement between the OCC and the bank to be both timely and constructive. As a de novo bank in our formative years, maintaining close communications with our regulators and developing and implementing policies and procedures that support our business plan are critical to aligning our long term plans with the expectations of the Comptroller.

“Since assuming the additional role of CEO on March 31, 2010, simultaneous with the completion of our private placement capital offering, my focus is on the key issues of regulatory compliance, and governance, as well as the strategic planning process including business and capital planning, and risk management initiatives.”

David Bagatelle, president of Herald National Bank, said: “Our charge from this point is clear: manage and maintain our clean balance sheet and control our rate of growth in a manner that is supportive of our clients while minimizing portfolio risk.”