Magazine article American Banker

FDIC Looks to Ban Ex-CEO of Failed Tennessee Bank

Magazine article American Banker

FDIC Looks to Ban Ex-CEO of Failed Tennessee Bank

Article excerpt

Byline: Kristin Broughton, Robert Barba

The Federal Deposit Insurance Corp. is looking to ban a former Tennessee banker from the industry following his institution's 2012 failure.

The FDIC disclosed Friday a notice of its intention to prohibit Michael R. Sapp, the former president and chief executive of Tennessee Commerce Bank in Franklin, from further participating in the affairs of an insured institution without prior written consent of the FDIC or other appropriate federal regulators. The $1.2 billion-asset Tennessee Commerce was seized by regulators in January 2012 and the failure was projected to cost the Deposit Insurance Fund $417 million.

The FDIC alleges Sapp "engaged in, caused, or allowed violations of law and a series of unsafe and unsound actions designed to conceal the bank's losses" on loans to Diversified Financial Resources and DDI Leasing. The FDIC is also looking to assess a $485,000 civil money penalty.

"I am looking forward to clearning my name and I refuse to give in to what seems like FDIC extortion," Sapp said in a brief interview.

The FDIC's notice to Sapp was disclosed as part of the FDIC's monthly regulatory roundup released on Friday. It also issued enforcement actions against four banks in April.

The FDIC issued supervisory prompt corrective action directives to the $64 million-asset Highland Community Bank in Chicago and the $149 million-asset State Bank of Herscher in Illinois. The orders call for the significantly undercapitalized banks to immediately increase their capital levels or accept acquisition offers. …

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