Former Bank CEO's Son Did a Large Portion of Georgian Bank's Appraisals

Should the FDIC sue bank directors and executives if they prove regulators’ assertions of "unsafe and unsound banking practices" and wrongful acts?

Here are some excerpts from an article about the failure of Georgian Bank.

"Sources in the banking industry say the FDIC has sent “demands for civil damages” to directors and officers at some Georgia banks."

"Regulators criticized the bank for allegedly inadequate appraisals used in loan underwriting and for renewing development loans without updated valuations of the collateral."

"Regulators also criticized the bank for the use of Teel Appraisals & Advisory Inc., a company owned by Georgian Bank CEO Gordon Teel's son, which apparently performed a “large portion” of the bank’s appraisals."

"A proxy filed November 22, 2004, with the SEC prior to the company changing from publicly to privately held shows that the firm was paid $324,000 for appraisal services, or about 90 percent of the total paid during the first nine months of that year for appraisals."

Click Here for Details on the Georgian Bank Situation

Obviously, Georgian bank didn't have a proper appraisal process management plan in place. If you feel that your bank could use some help with addressing appraisal independence (compliance with Part 323 of FDIC Laws and Regulations) give me a call. Integra can help.