Opinion ID: 3009834
Heading Depth: 2
Heading Rank: 1

Heading: Statewide's Demise

Text: Statewide Bancorp was a bank holding company with its principal office in Toms River, New Jersey. During the time relevant to this appeal, it operated through two wholly owned subsidiaries, The First National Bank of Toms River, New Jersey (FNBTR), and The First National Bank of New Jersey/Salem County. Statewide began experiencing financial difficulties in 1989. Between July 1989 and December 1989, the market value of Statewide Bancorp common stock fell from $18.25 per share to $9.50 per share. Dist. Ct. op. at 2. During the next year, the price fell even more precipitously -- to $6.00 per share in July 1990, to $2.25 per share in December, and finally to less than 25 cents per share in May 1991. During this period -- from 1989 through 1991 -- federal regulatory authorities repeatedly expressed concern to Statewide's Board of Directors over problems with Statewide's portfolio and financial condition. On July 31, 1989, the Office of the Comptroller of the Currency (OCC) informed the Statewide Board that [c]ompliance management in the two subsidiary banks was found to be satisfactory in virtually all areas. Letter of July 31, 1989 at Expanded Appendix (EA) 606.0 Nevertheless, the OCC letter indicated that [v]iolations 0 We cite the appendix as app., the supplemental appendix as SA and the expanded appendix as EA. There is an expanded appendix because the Committee made a motion which Moench opposed to expand the appendix to include materials which were not before the district court. Ordinarily we would have denied the motion. Here, however, a significant portion of the expanded appendix consists of actual copies of documents that were summarized to the district court pursuant to Fed. R. Evid. 1006. Rule 1006 states that [t]he contents of voluminous writings . . . which cannot conveniently be examined in court may be presented in the 4 of law and regulation were found across a number of areas in the subsidiary banks [and] [w]hile management has shown a commitment to promptly correct all violations, the need to develop in certain cases and otherwise improve policies and procedures is clearly evident. Id. A March 1990 report of an off-site review of FNBTR revealed lack of depth and quality of management, unsafe and unsound credit practices, the resulting rapid deterioration in the quality of the loan portfolio, unreliable regulatory and management reports on loans, the inadequacy of the Allowance for Loan and Lease Losses, and the adverse impact of asset quality upon earnings and capital adequacy. EA 690. Ultimately, on May 22, 1991, the Federal Deposit Insurance Corporation took control of FNBTR and on May 23, 1991, Statewide filed a voluntary petition under Chapter 11 of the Bankruptcy Code.