Paul E. Utterback looked as if he were gracefully retiring from a 40- year banking career, until regulators accused him of bilking the bank he chaired.

He announced his resignation as chairman, director, and controlling shareholder of $147 million-asset Bank of Alton, Ill., in November. Shortly thereafter, the Federal Deposit Insurance Corp. fined him $65,000 and barred him from banking. The agency had accused him in February of unduly enriching himself and his company through loans and questionable relationships with the bank.

Without admitting or denying the allegations, Mr. Utterback agreed to the order and to pay the $65,000, amended from an original fine of $155,000.

In a prepared statement, Mr. Utterback said he was "well acquainted with banking regulations."

"I have never intended to do anything wrong," he said. "In fact, I am quite bewildered by the FDIC's position, particularly because their criticisms were of minor administrative matters and were based on questionable technical interpretations of banking laws."

According to FDIC documents, allegations against Mr. Utterback include purchasing more than $9 million in split-dollar life insurance policies without authorization, resulting in excessive compensation. He received undisclosed commissions on the sale of the policies, in which the bank pays the premiums and is reimbursed from death benefits or cash surrender value.

The FDIC also said the 71-year-old chairman changed the beneficiary of bank-owned life insurance policy to his own company, Midwest Financial Planning, without telling the bank's board.

Regulators charged that, in addition, Midwest Financial Planning received unauthorized commissions from the bank on its profit-sharing program, although Midwest Financial did no work for the bank.

Mr. Utterback also insured his personal vehicles through the bank, initiated the bank's purchase of municipal bonds without disclosing his personal interest in a related real estate venture, and violated Regulation O by arranging for more than $500,000 in loans to himself and his businesses without board approval, according to the FDIC.

Nonetheless, Billy R. Summers, who replaced Mr. Utterback as the bank's chairman, said in a prepared statement that Mr. Utterback had long planned to retire Dec. 1 regardless of the enforcement action, and will pursue civic projects in the Alton area.

Mr. Summers said he and other board members also were "distressed" and "bewildered" by the FDIC's actions.

"Mr. Utterback ran the Bank of Alton with great integrity and success for 22 years," he said. "We are proud to have been associated with him."

Bank of Alton reported recent return on assets of 1.72% and return on equity of 13.26%.

After the FDIC announced its intended actions against Mr. Utterback, he requested a private hearing on the matter, saying a public one could threaten the bank's safety and soundness and competitors could capitalize on any customer concerns, particularly a new bank that employs two former officers and directors of Bank of Alton.

His request was denied and he chose to forego a public hearing.

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