Opinion ID: 2982178
Heading Depth: 2
Heading Rank: 2

Heading: The Bank's Financial and Regulatory Troubles

Text: On March 29, 2010, the Michigan Office of Financial and Insurance Regulation (“OFIR”) issued a “Report of Examination” on the Bank, identifying alleged “violations of law, rules, and regulations.” On March 31, 2010, CCB reported over $10 million in losses for the fourth quarter of 2009. Approximately $5.9 million of this loss was attributable to a “valuation allowance” on CCB's net deferred tax assets, described as a “one-time non-cash charge to federal income tax expense.” This valuation allowance accounted for “approximately 60% of the operating loss for the fourth quarter [of 2009] and 40% of the loss for 2009.” On November 1, 2010, CCB entered into a Consent Order with the FDIC and the Michigan OFIR. CCB agreed to the Order “without admitting or denying any charges of unsafe or unsound banking practices relating to weaknesses in asset quality, earnings, and capital and without admitting or denying any violations of law, rule, or regulation.” CCB agreed, among other things, to retain “qualified management”; operate the Bank in a “safe and sound manner”; retain an independent third party to develop a management plan; increase Board participation in the Bank's affairs; adjust its level of working capital; cease extending loans to certain borrowers; adopt a plan to increase liquidity; and “eliminate and/or correct all violations of law, rule, and regulations listed in the ROE.” In April 2011, the Bank failed and was placed into receivership.