The bank is local to the Puget Sound area: American Marine Bank, based on Bainbridge Island and with 11 branches in the Puget Sound area. It was founded in 1948. All branches were closed by the FDIC in 2010 and assumed by Columbia State Bank of Tacoma. Now, the officers of the bank are being sued for $18 million by the FDIC for gross negligence in lending practices.
The complaint, filed in district court in Tacoma, holds 10 of the bank’s officers personally responsible for $18 million of the $61 million that the FDIC had to pay out when the bank was closed. The claim is that the officers did not use diligence when granting loans, violating their own policies in the process.
“Defendants, 10 of AMB’s former directors and/or officers, caused damages by failing to approve loans in the manner required under the applicable loan policies and by approving loans that did not warrant approval,” the complaint states. “Collectively, the defendants were charged with, among other responsibilities, the responsibility of operating and managing the lending function of AMB. But, rather than manage AMB’s lending function in a safe, sound and reasonable manner, the defendants took unreasonable risks with the bank’s loan portfolio; allowed irresponsible and unsustainable rapid asset growth concentrated in high-risk and speculative acquisition, development and construction (‘ADC’), and commercial real estate (‘CRE’) loans, disregarding regulator advice and criticisms regarding lending activities; and violated AMB ‘s loan policies and reasonable industry standards.”