PANAMA CITY — The former directors of a failed local bank have agreed in principle to a settlement with the Federal Deposit Insurance Corp., according to a status report filed Monday.
In December 2012, the FDIC filed a suit against the former board of directors and executives at Panama City-based Peoples First Community Bank, which failed in December 2009, for gross negligence for allegedly failing to properly vet applications on 11 risky loans totaling $77.1 million.
Proceedings in the case against the bankers had been on hold for a month while the case went to mediation. Both parties now are asking for an additional 30 days so the defendants can provide “additional detailed information,” according to a status report, which does not divulge any specific details of the settlement or the information the bankers will provide to the FDIC.
Named as defendants in the suit are Panama City Mayor Greg Brudnicki, Joseph F. Chapman, III, Harry Clayton Futrell, Philip W. Griffitts, John Robert Middlemas, Rodney C. Morris, Raymond E. Powell and John Stephen Wilson II.
Despite warnings from federal regulators as early as 2005, the bankers continued to approve loans the FDIC contends they should have known were too risky. The 11 loans at issue were approved between November 2005 and August 2007, and caused nearly $41.5 million in damages to the FDIC.
Peoples First was the fourth-largest bank in Florida to fail during the Great Recession.