Sunday, May 11, 2014

FBI Now Reviewing First National Bank Edinburg Shutdown Information

Office of Inspector General (OIG) 
Report Reveals findings of 
First National Bank Edinburg failure 

A news report by San Antonio Express News journalist Patrick Danner points out interesting facts and statements about the OIG report!!

  • FNB Officials arranged for loans to borrowers to buy stock in their holding company generating $26M in capital to honor withdrawals and operating losses, violating federal banking regulations.

  • This apparently violated federal banking regulations which prohibit making loans on bank stock.

  • FBI confirms it is reviewing information pertaining to FNB closure. 
(oh shit!)

  • FNB directors "gambled with depositors money, not their own"

  • FNB makes phony "Capital injections"
          (Just Kickin' the Can Down the Road)

  • OCC claims FNB Directors pressured at least one loan officer to change risk ratings on loans to hide actual risk 
(oh shit, again)!

  • Tundra Village Defendant David Rogers exerts "undue" influence is instrumental in FNB failure
  • Bankers and experts ask, "where were the regulators?"
  • Bankers are pissed!  "We have to replenish the DIF by higher assessments! They (OCC) didn't protect the fund."
  •  FNB Directors "Manufactured" Income

  • FNB loans to holding company are reminiscent of a criminal case involving president of Orion Bank in Florida who was sentenced to six years in federal prison 
(oh shit x 3!)

  • OIG concludes OCC "should have drilled down on the source of the injections" 
(how observant!)

  • OCC closed (audit) matter in 2009 "without sufficient evidence" FNB management had corrected problem.  FNB had "masked" problems in its foreclosed real estate portfolio by financing sales on "liberal terms" with 100% financing 
(Now everybody shout, "Jadon Construction and Tundra Village", and "Remember Eric Sherer's testimony at the 2011 Padilla sentencing?"

  • OCC didn't discover these liberal terms until 2013 
(now everybody shout, "Remember the 2011 Padilla sentencing when FNB president Jim Davis admitted selling Tundra Village for $9.3M but it only had an appraisal of $2.1M and even he would give you that much for it!"  
Yes, really, 2011!!  They (OCC) don't remember reading this blog???)

  • Is it "possible regulators held off closing FNB as long as possible to avoid a big hit to the DIF?"

(No shit Sherlock, it is possible!)

Yes, folks, it's just starting to get good! 

1 comment:

  1. Still surprised that the external auditors haven't been indicted - especially after reading the comments in the report about non-accrual loan accounting. What a scam!