{{4-1-90 p.C-310.4}}
[¶ 10,063] In the Matter of Daniel B. Longino, Docket No. FDIC-90-55b (4-12-90).
Respondent to cease and desist from practices such as engaging in practices which produce inadequate operating income and excessive loan losses and hazardous lending and ineffective and lax collection policies, operating with an excessive amount of adversely classified assets, with equity capital inadequate for the kind and quality of assets held by the bank, and with excessive volatile liabilities funding long-term investments and loans; and violating applicable federal and state laws.
[.1] Loans—Extension of Credit—Nonparticipation of Respondent
[.2] Funds Management—Nonparticipation of Respondent
[.3] Loan Guarantees—Nonparticipation of Respondent
[.4] Shareholders—Disclosure—Cease and Desist Order
(Next page is C-311.)
{{11-30-93 p.C-311}}
In the Matter of
DANIEL B. LONGINO,
individually, and as an
institution-affiliated party of
FAIRBURN BANKING COMPANY
FAIRBURN, GEORGIA
(Insured State Nonmember Bank)
ORDER TO CEASE AND DESIST
Daniel B. Longino ("Respondent"), individually, and as an institution-affiliated party of Fairburn Banking Company, Fairburn, Georgia ("Bank"), having been advised of his right to a written Notice of Charges and of Hearing detailing the unsafe or unsound banking practices and violations of applicable laws and regulations alleged to have been committed by the Respondent and of his right to a hearing regarding such alleged charges under section 8(b)(1) of the Federal Deposit Insurance Act, ("Act"), 12 U.S.C. § 1818(b)(1), and having waived those rights, entered into a STIPULATION AND CONSENT TO THE ISSUANCE OF AN ORDER TO CEASE AND DESIST ("CONSENT AGREEMENT") with a representative of the Legal Division of the Federal Deposit Insurance Corporation ("FDIC"), dated April 3, 1990, whereby solely for the purpose of this proceeding and without admitting or denying any of the alleged charges of unsafe or unsound banking practices and violations of applicable laws and regulations, the Respondent consented to the issuance of an ORDER TO CEASE AND DESIST ("ORDER") by the FDIC.
The FDIC considered the matter and determined that it had reason to believe that the Respondent had engaged in unsafe or unsound banking practices and had committed violations of applicable laws and regulations.
The FDIC, therefore, accepted the CONSENT AGREEMENT and issued the following:
ORDER TO CEASE AND DESIST
IT IS HEREBY ORDERED, that the Respondent cease and desist from the following unsafe or unsound banking practices and violations of laws and regulations:
A. Engaging in practices which produce inadequate operating income and excessive loan losses;
B. Engaging in hazardous lending and ineffective and lax collection practices, including but not limited to; (i) failing to provide an adequate loan policy for the Bank; (ii) operating the Bank in contravention of its written loan and appraisal policies and procedures; and (iii) extending credit which is inadequately secured and/or which has inadequate or deficient supporting loan documentation, including but not limited to current financial statements, insurance coverage, title searches or legal opinions, recordation of lien positions, and cash flow and/or operating information;
C. Causing the Bank to operate with an excessive volume of adversely classified assets;
D. Causing the Bank to operate with equity capital that is inadequate to support the kind and quality of assets held by the Bank;
E. Causing the Bank to operate with excessive volatile liabilities funding long-term investments and loans; and
F. Violating applicable Federal and state laws and regulations.
IT IS FURTHER ORDERED, that the Respondent take affirmative action as follows:
[.1] 1. (a) Effective the date of this ORDER, the Respondent shall not participate, directly or indirectly, in any manner in the Bank's lending function, including but not limited to: (i) approving, authorizing, recommending approval of, or making any extension of credit to any borrower; (ii) performing any collection duties; (iii) documenting loans; (iv) evaluating borrowers' creditworthiness; (v) performing collateral evaluations or appraisals; (vi) approving, authorizing, recommending approval of, or issuing letters of credit; and (viii) formulating and/or implementing the Bank's lending policies.
(b) For purposes of this paragraph, "extension of credit" has the meaning ascribed to this term in section 215.3 of Regulation O of the Board of Governors of the Federal Reserve System, 12 C.F.R. § 215.3.
[.2] 2. (a) Effective the date of this ORDER, the Respondent shall not participate, directly or indirectly, in any manner in the Bank's investment or liquidity and funds management functions, including but not limited to: (i) the purchase or sale of any securities on behalf of the Bank; (ii) the purchase or sale of Federal funds on behalf of the Bank; (iii) the purchase or sale of any real or personal property on behalf of the Bank;
{{11-30-93 p.C-312}}(iv) the review, authorization, approval, recommendation or making of any investment of Bank funds; (v) the solicitation or acceptance of any funds obtained, directly or indirectly, by or through any deposit broker for deposit into one or more deposit accounts at the Bank; and (vi) the formulation or implementation of any Bank investment, liquidity or funds management policies.
(b) For purposes of this paragraph, "deposit broker" shall have the meaning ascribed to this term in section 29(f) of the Act, 12 U.S.C. § 1831f(f).
[.3] 3. Effective the date of this ORDER, the Respondent will not issue guaranties on behalf of the Bank.
[.4] 4. Following the effective date of this ORDER, the Respondent shall send to the Bank's shareholder or otherwise furnish a description of this ORDER. The description shall fully describe this ORDER in all material respects. The description and any accompanying communication, statement or notice shall be sent to the FDIC, Registration and Disclosure Unit, Washington, D.C. 20429 for review at least 20 days prior to dissemination to the shareholder. Any changes requested to be made by the FDIC shall be made prior to dissemination of the description, communication, notice or statement.
5. The provision of this ORDER shall become effective ten (10) days from the date of its issuance and shall be binding upon the Respondent. The provisions of this ORDER shall remain effective and enforceable except to the extent that, and until such time as, any provisions of this ORDER shall have been modified, terminated, suspended, or set aside by the FDIC.
Pursuant to delegated authority.
Dated at Atlanta, Georgia, this 12th day of April, 1990.
