Federal regulators are suing 11 former officers and directors of a failed west Georgia bank, claiming gross negligence in their oversight.
The Federal Deposit Insurance Corp. said in a civil complaint filed Friday that the First National Bank of Georgia officials failed to follow sound banking practices in approving 14 real estate loans that led to heavy losses. The FDIC is seeking damages “in excess of” $29.9 million.
An attorney for the defendants said the claims are “without merit” and that the officials “proudly served their community for decades as officers and directors” of the bank.
The regulators allege, among other things, that the officials allowed excessive concentrations of risky development loans, did not properly vet loans and failed to heed warnings from bank examiners.
First National, based in Carrollton, about 50 miles west of downtown Atlanta, failed in January 2010. The FDIC estimated at the time that its failure would result in a loss of more than $260 million to the FDIC’s insurance fund, the backstop that protects depositors.
The defendants are: former CEO Howard B. Lipham III; former President Randall F. Eaves; former Executive Vice President Mary M. Covington; and directors Grady W. Cole, Richard A. Duncan, W. Thomas Green Jr., Lemuel G. Joyner, R. David Perry, Thomas T. Richards, J. Thomas Vance and Charles M. Willis Sr.
The defendants “faithfully fulfilled their responsibilities and at all times acted in the best interest of the bank,” their lawyer, Alston & Bird attorney Mary Gill, said in a statement.
Georgia leads the nation in bank failures since mid-2008. The case is at least the 15th liability lawsuit filed against former insiders of a failed Georgia bank.
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