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February 2009 Report No. AUD-09-003 Material Loss Review of First Priority Bank, Bradenton, Florida AUDIT REPORT Report No. AUD-09-003 February 2009 Material Loss Review of First Priority Bank, Bradenton, Florida Federal Deposit Insurance Corporation Audit Results Why We Did The Audit FPB failed primarily due to bank management’s aggressive pursuit of asset growth concentrated in high-risk CRE loans with inadequate loan underwriting and a lack of other loan portfolio and risk As required by section 38(k) of the management controls. Resulting losses severely eroded FPB’s earnings and capital, and negatively Federal Deposit Insurance (FDI) Act, impacted liquidity, leading to the bank’s failure and a material loss to the DIF. the Office of Inspector General (OIG) conducted a material loss review of the Management. FPB’s Board of Directors (BOD) did not ensure that bank management identified, failure of First Priority Bank (FPB), measured, monitored, and controlled the risk of the institution’s activities. In addition, the BOD did Bradenton, Florida. On August 1, 2008, not ensure that corrective actions were implemented in response to examiner and auditor the State of Florida, Office of Financial recommendations. Further, FPB developed a business plan governing its activities; however, the plan Regulation (OFR), ...