Another bank looks like it's circling the drain

[rainbow4321]

http://www.tulsaworld.com/news/article.aspx?subjectid=13&articleid=20090228_13_0_ALTUSS118317

State and federal regulators have placed First State Bank of Altus under supervision for hazardous lending, inadequate capital and earnings, and an excessive level of bad loans, according to an order made public Friday.

The Altus bank, which lost $5 million in 2008, was one of only a few Oklahoma banks that failed to turn a profit last year. On Dec. 31, the bank had more than $17 million in loans listed as nonaccrual, which means that loans are no longer gathering interest, and payment of the principal is uncertain. Also, $8.7 million in loans were more than 90 days past due.

First State Bank made major loans to Quartz Mountain Aerospace, an aircraft manufacturer that has defaulted. The Altus bank also loaned millions to an out-of-state residential development project that is mired in bankruptcy, First State Bank President Larry McLaughlin said.

Bank officers have developed a four-point plan to restore the bank’s balance sheet, McLaughlin said. A pending bond issue could produce some cash for Quartz Mountain Aerospace to repay some of its debt, he said. The settlement of some litigation related to the residential development loans also could result in some recovery of loaned money, he said.


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The below link is from one of the commenters below the article, more aboutthe Quartz Mountain Aerospace (part of the bank's dealings):


http://prowlingowl.com/Blog/FSBCeaseDesistOrder.cfm

The Federal Reserve Board today announced the issuance of a Cease and Desist Order against FSB Bancorp, Inc., Altus, Oklahoma, a registered bank holding company and subsidiaries including but not limited to a complete list at the bottom. Most notably First State Bank Altus, OK; Altus Ventures (3); and Quartz Mountain Aerospace, Inc. Altus.

For those not familiar - many of these affiliates and officers have been at the center of the tax credit abuse scheme ProwlingOwl.com has been attempting to expose for the last two years and legal actions over the current Colorado we have reported on ProwlingOwl.com.

Paul Doughty who was just recently relieved as president, First State Bank Altus, and is still listed as president of LLC affiliates involved in both tax credits and the Colorado land scam, was also the individual allowed to advise on language in the 2006 amendment that failed to close the tax credit loopholes. Doughty's involvement in that effort coincided with large campaign donations to the chairman of the house tax revenue committee responsible for the amendment.

Paul Doughty as reported by AP, in 2006, was involved in using a $189 million loan to inflate the claimed investment in Quartz Mountain Aerospace to $221 million. Then claimed $66 million in tax credits for what was in reality only a $32 million investment. QMA recently closed its doors for lack of funds, without ever receiving the $189 million. Yet state officials have totally ignored calls to investigate what happened to the $189 million.

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Included in the cease and desist:

First State Bank Altus, OK
Altus Ventures Capital Fund III, LLC
Altus Ventures Capital Fund IV, LLC
Altus Ventures Capital Fund V, LLC
Quartz Mountain Aerospace, Inc. Altus
Global Industrial Leasing, LLC
Oklahoma Industrial Venture Management Company, LLC FSB Development Capital, LLC
FSB Financial Planning LLC
First State Insurance Agency, Inc
Bankers Benefit Solutions, Inc
FSB Bancorp Capital Trust I


Others subsidaries include

Global Industrial Venture Management, LLC
Oasis Development, LLC

[lonestarnot]

1. Which ones failed yesterday?

Is AM Trust out of Ohio on the list?

[rainbow4321]

2. Hmmm..don't remember seeing a list here (yet)

But I imagine after this article hit the Tulsa World there was a customer run on the Altus bank today (or there will be on Monday!)