Florida Bank Accused Of Hiding Losses On Sour Mortgage Loans

In Manatee County, Florida, the Sarasota Herald Tribune reports:

• Freedom Bank lost $5.8 million in 2007, a major hit for the 21/2-year-old community bank. But it may be worse. Freedom's former senior lending officer has accused the bank of concealing its true financial condition by downplaying its bad loans. In a lawsuit, Mark S. Williams claims he quit the Bradenton-based bank last month after being pressured to understate its problem assets. Williams, who was also the bank's executive vice president, calculated that the bank needed to expense $11 million in the fourth quarter to downgrade and reserve for bad loans and real estate it owned from foreclosed borrowers.

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• In his lawsuit, Williams says an unidentified member of Freedom's board of directors urged him several times to shred his original report that recommended the $11 million in loan-loss reserves. He also says [Freedom president/chief executive officer Gerald] Anthony forced him to fire two loan officers so they could not talk to incoming examiners from the Federal Deposit Insurance Corp.

For more, see Bank accused of hiding losses (A former Freedom Bank executive alleges pressure to downplay bad loans).