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OCC PLACES AMERICAN COMMERCE NATIONAL BANK IN RECEIVERSHIP

 WASHINGTON, April 30 /PRNewswire/ -- At 6 p.m. EDT today, the Office of the Comptroller of the Currency (OCC) appointed the Federal Deposit Insurance Corporation (FDIC) as receiver of American Commerce National Bank, Anaheim, Calif.
 The FDIC Improvement Act gives the OCC authority to appoint the FDIC receiver for national banks that are not insolvent when they meet specific criteria. The OCC used this authority when it found American Commerce National Bank to be in an unsafe and unsound condition to transact business. The OCC also found that the bank had violated laws and regulations and engaged in unsafe and unsound practices that had caused and was likely to continue to cause substantial dissipation of assets and earnings. Finally, the OCC found that American Commerce had concealed books, records and assets and had refused to submit books and records that OCC examiners needed to properly assess the bank's condition and its compliance with laws and regulations. In light of these findings, the OCC determined that the appointment of the FDIC as receiver was necessary to protect the interests of the bank's insured depositors.
 The OCC found the volume of problem assets at the bank greatly exceeded its capital. The OCC also determined that the bank was operating with long-standing, seriously deficient lending practices; a weak, abusive and self-serving management and directorate; a critically high volume of problem assets and an inordinate reliance on volatile, high cost deposits to fund its operations.
 Among other things, the OCC found:
 -- the bank had paid the legal fees for defense of the chairman and chief executive officer in his disbarment proceeding in New York;
 -- an executive officer of the bank who had loans from the bank concealed his bankruptcy from OCC examiners; in addition, the bank's chairman and CEO, who was the borrower's brother, removed documents relating to the bankruptcy from bank loan files;
 -- insiders received preferential treatment on loans -- including being permitted to repay principal at their discretion and having late fees waived;
 -- insiders (directors and executive officers) concealed from OCC examiners businesses in which they had ownership interests or control; they also concealed that loans to the insider-related entities received preferential treatment;
 -- almost $30 million of loans were classified and 11 percent of assets were non-performing;
 -- the bank was heavily dependent on out-of-area deposits -- only 11 percent of the bank's deposits were from the bank's local area;
 -- only 17 percent of the bank's loans were made in the area, with a significant number of those loans extended to bank insiders.
 As a result of these and other findings, the OCC has served notices of intention to prohibit further participation against the entire board of directors and all but one member of senior management. These notices begin the process of prohibiting the individuals from participating in any manner in the conduct of the affairs of any insured bank, savings association, or credit union. A list of individuals served with these notices follows.
 The OCC considered whether the public interest would be better served by appointing a conservator for American Commerce rather than putting it into receivership. However, the OCC determined that the bank's pervasive concealment and falsification of bank records would make it virtually impossible for even the most capable conservator to ascertain the full extent of the bank's unsafe and unsound condition, or its unsafe, unsound and abusive practices. The OCC believed that a conservator would have to replace all of present management and would not be able to find new management in time to save the bank. As a result, a conservator would be prevented from achieving the purpose of conservatorship -- conserving a bank's assets.
 American Commerce National Bank was chartered Feb. 29, 1984. On March 21, 1989, it entered into a formal agreement with the OCC to correct its problems. The bank never complied with the agreement. As of March 31, 1993, American Commerce had total assets of approximately $139 million.
 The FDIC is expected to announce further information about the resolution of American Commerce at a later date.
 Notices of Intent to Prohibit Further Participation
 Management
 Chairman of the Board and Chief Executive Officer Gerald J. Garner
 President Michael G. Hales
 Senior Vice President Daniel Garner
 Chief Financial Officer Robert Duncan
 Senior Lending Officer William Kavanagh
 Senior Credit Administrator Robert Young
 Board Members
 Eugene A. Alterman
 Norman Charney
 Joan G. Garner
 Galal S. Gough
 Duffern H. Helsing
 Stanley A. Kaller
 Judy Mandel
 -0- 4/30/93
 /CONTACT: Dean DeBuck of the Office of the Comptroller of the Currency, 202-874-4700/


CO: Office of the Comptroller of the Currency; American Commerce
 National Bank ST: California, District of Columbia IN: FIN SU:


DC-TW -- DC037 -- 3481 04/30/93 18:57 EDT
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Publication:PR Newswire
Date:Apr 30, 1993
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