BIG CHAIN - Financial regulators have taken action to effectively ban Frank William “Bill” Bonan II from the banking industry.
Regulators also fined him $ 105,000 for “reckless practices” and personal dishonesty that endangered the Grand Rivers Community Bank, headquartered in Grand Chain.
The action of the Federal Deposit Insurance Corp. stems from a complicated series of loans to high-risk borrowers involving two banks: Grand Rivers, where Bonan II was chairman of the board, and Peoples National Bank, based in Mount Vernon, where he was also employed as an executive banking.
At the time of the 2015 transactions investigated by the FDIC, Grand Rivers was in the process of merging with Peoples Bank. Peoples, long managed and owned by the Bonan family, is a large regional financial institution with branches in Illinois and Missouri. At one point, Bonan II was president of the Marion, Benton and Harrisburg branches.
The subprime loans under FDIC review were associated with oil rigs and a commercial warehouse in Carmi. The FDIC found Bonan II to be dishonest in his dealings with other members of the Grand Rivers board of directors as they were considering certain loans and withholding creditworthiness information from borrowers he was aware of due to his dual roles. at Grand Rivers and Peoples.
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Bonan II was aware that some borrowers had multi-million dollar subprime loans with Peoples at the time Bonan II was encouraging Grand Rivers to extend new ones, but did not pass this information on to an affected board member, according to the FDIC opinion.
Additionally, according to the FDIC report, Bonan II decided not to secure a loan by removing an oil rig that had served as collateral, causing the bank to suffer financial losses when borrowers defaulted. .
The borrowers in question included two employees of Bonan II and companies involved in the oil industry owned by a father-daughter couple who later became his wife and stepfather. The FDIC concluded that Bonan II’s “reckless practices” and violations involving “personal dishonesty” showed a “willful and continued disdain for the safety and soundness” of Grand Rivers.
The May 5 FDIC order said Bonan II had 20 days to request a hearing challenging the agency’s findings and punitive actions before an administrative law judge. It was not immediately clear to the newspaper whether Bonan II had requested such a hearing. A spokesperson for the FDIC said the agency could offer no additional information beyond that of the published notice, including whether a hearing was requested. A message left at Peoples National Bank requesting comment and / or assistance in delivering a message to Bonan II was not returned.
Ultimately, Bonan II’s misdeeds at Grand River Community Bank, as described by the FDIC, torpedoed Grand Rivers’ merger with Peoples. In March 2017, Grand Rivers filed a civil action against Peoples Bank, Bonan II and other associated entities seeking to reverse the merger on the basis of alleged “door-to-door transactions, preferential transactions and improper transfer of low-quality assets from Peoples in Grand Rivers. . “
The lawsuit personally accused Bonan II of engaging in a pattern of self-treatment for himself, his family and friends, and a romantic partner. In court records, Peoples and its affiliates have denied any wrongdoing alleged in the lawsuit. Additionally, they filed a counterclaim against Grand Rivers and a third-party entity alleging violation and interference with a contractual agreement for Grand Rivers to merge with Peoples.
The parties came to an amicable settlement, and the lawsuit and counter-lawsuit were dismissed a year later.
In addition to serving as a bank executive, Bonan II was involved in various other business ventures in southern Illinois, including managing video game parlors, and was appointed by the then governor. . Rod Blagojevich to serve on the board of directors of Southern Illinois University, a position he held from 2008 to 2011.
On Twitter: @MollyParkerSI