Audit Report: Material Loss Review of Freedom Bank, Bradenton, Florida, Posted May 12, 2009: “FB 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 management controls. In addition, FB had a lending incentive compensation program without substantive credit quality controls that contributed to the bank’s rapid loan portfolio growth and rewarded loan officers without consideration of actual loan performance. Resulting losses severely eroded FB’s earnings and capital and negatively impacted liquidity, leading to the bank’s failure and a material loss to the DIF.”