The Federal Deposit Insurance Corp. is seeking $6.3 million in damages from three former directors of the failed Progress Bank of Florida in Tampa.
The FDIC lawsuit charges Thomas Rummel, Progress' former president, chief executive and chief loan officer, and former directors Laurence Fentriss and Timothy Anonick with negligence and breaches of fiduciary duty in their management of the bank's lending functions. The men assumed their roles at Progress after the bank was bought by private-equity group Community Bank Investors of America, where Fentriss and Anonick were partners, in 2007.
The complaint, filed in October, alleges that the defendants adopted an aggressive commercial lending strategy that led Progress to accumulate an irresponsible concentration of commercial and commercial real estate loans. The real estate market crash crippled Progress' capital and liquidity, resulting in major losses. Regulators closed the bank in October 2010, costing the FDIC an estimated $46.8 million.
Rummel, Fentriss and Anonick also extended credit to borrowers who were not creditworthy, allowed loans of depositor funds in violation of the bank's policy and permitted poor loan underwriting, the complaint said. The lawsuit cites nine specific commercial real estate and commercial loans made from May 2007 to July 2009 that were allegedly approved by the defendants in violation of the bank's loan policy.