By Sandra Emerson, Redlands Daily Facts
Posted: 01/25/14, 9:46 PM PST |
REDLANDS >> Five years ago this week, 1st Centennial Bank in Redlands became the third of more than 120 banks to fail in 2009 as part of a nationwide financial meltdown.
The bank, formerly at 218 E. State St., was closed on Jan. 23, 2009, ending a 19-year history as Redlands’ community bank. The Federal Deposit Insurance Corp. filed a complaint in January 2011 against the bank’s former directors and officers for negligence — some of the 1,058 individuals named in 131 lawsuits filed by the agency between January 2009 and Dec. 10, 2013.
In August, 1st Centennial’s former directors and officers agreed to pay $7.25 million as part of a settlement with the FDIC. The defendants’ insurance carrier was responsible for $6.5 million, leaving them to pay $750,000 by September.
The defendants were former University of Redlands President James Appleton, former Mayor Carole Beswick, business owner Larry Jacinto, business owner Bill McCalmon, 2009 Man of the Year Stan Weisser, development consultant Pat Meyer, former 1st Centennial President and CEO Tom Vessey, former 1st Centennial Vice President and Chief Credit Officer John Lang, and Bruce Bartells, Ronald Jeffrey, Douglas Welebir and Clifford Schoonover.
Jacinto and Meyer declined to comment. Several other defendants could not be reached for comment.
Attorneys representing the defendants did not return calls and emails seeking comment.
Banks, such as 1st Centennial, were hurt by the economic downturn, which resulted in a near 10 percent unemployment rate in the region by the end of 2008.
In November 2008, the California Department of Financial Institutions investigated 1st Centennial’s construction loan portfolio.
The FDIC joined the state agency in reviewing the bank’s portfolio, questioning $115.4 million in construction loans, more than half of the bank’s construction loan portfolio.
These loans “resulted in a significant and rapid deterioration of the bank’s financial condition,” according to findings from the April 2008 investigation.
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