Premier Financial Corp. in Huntington, W.Va., announced Tuesday that the Federal Deposit Insurance Corp. and the Kentucky Office of Financial Institutions had terminated a cease-and-desist order against one of its subsidiaries, Farmers Deposit Bank in Eminence, Ky.
The $64 million-asset Farmers had been operating under the order since Jan. 1, 2004, after examiners discovered that its former chief executive had made a number of bad loans between 2001 and 2003 and then concealed the losses through bogus loans. As a result of the fraud, the $535 million-asset Premier had to restate its earnings for 2001, 2002, and 2003.
The cease-and-desist order required Farmers to clean up its loan portfolio, boost capital, and hire new management. It also said that under previous management Farmers had been "operating with disregard of routine and controls policies."
In 2003, Premier hired Carroll Yates as Farmers' chief executive. On Tuesday, Robert W. Walker, Premier's president and CEO credited Mr. Yates and his management team for leading the turnaround.
Premier, a five-bank holding company, is still under a cease-and-desist from the Securities and Exchange Commission in connection with the fraud at Farmers. That order was issued in September.
