Southshore Community Bank was a small institution that developed big problems.
The Apollo Beach bank got its start at the height of the real estate boom in September 2005, and it quickly loaded up on risky loans to real estate developers.
The bank lost key employees in the lending department. One-third of all the loans reviewed by state officials in August 2009 were missing important documents about borrowers and collateral.
Southshore Community also broke rules about obtaining appraisals and lending more to borrowers than properties were worth.
Reports to the board about how many risky acquisition, construction and development loans had been made differed widely from the figures published in quarterly financial statements — a discrepancy that appeared to stem from a lack of communication among top bank officials.
State regulatory reports also show that director Lawrence E. "Gary" Queen resigned after examiners discovered that loans he received from the bank exceeded the legal lending limit.
Queen could not be reached for comment.
Another director — Ronald A. Knight — said top officials could not comment because of pending legal matters.
"Inadequate risk management practices and flawed board reports have compounded the bank's problems and reflect poorly on the board in discharging its fiduciary responsibility," state regulators said.