Grand Rivers Community Bank was the scene of a robbery on June 14; Marcus Householder (inset, left) is accused of perpetrating it; Bill Bonan II (inset, right) was removed from the bank a few months ago.
GALLATIN CO. – A Shawneetown bank was robbed literally days after the Illinois Department of Financial and Professional Regulation’s Division of Banking submitted a consent order, decreeing that changes must be made at the bank or charges could follow.
And while a few might protest that the two events have nothing to do with each other and are purely coincidental, sources in the know are stating that that may not be the case at all.
What the whole thing means for Grand Rivers Community Bank may not be as life-altering, however, as it may be for the man who started GRCB, Frank William Bonan II.
Known locally as Lil Bill, Bonan has been observed in the early-to-mid part of June having high-speed comeaparts in various locales, Harrisburg being but one.
And those in the know are saying that the fits he’s experiencing – some of them VERY public – all lead back to the pressure the IDFPR has brought, and what’s been happening at GRCB…including the June 14 robbery.
Robbery and crash
On that day, authorities allege, an armed man walked into GRCB at about 10:45.
Displaying a firearm, the type of which hasn’t been disclosed, the white male who appeared to be in his 30s obtained an undisclosed amount of cash and left the building, which sits on Shawnee Avenue, just off Illinois Route 13’s westbound lane.
He got in a Ford Fusion that was described as either gold-toned or silver, and which bore dealer plates, and sped off on 13 toward the Ohio River Bridge that crosses into Kentucky.
A multiple-agency response was seen very quickly at Grand Rivers Community Bank in Shawneetown on June 14 after the robbery.
There, in Union County, Deputy Jason Thomas, on alert that there was a vehicle speeding into his county from Illinois, saw the car – a silver Fusion – traveling east on Kentucky 56 West. He gave chase, headed toward Morganfield, Kentucky, at speeds exceeding 70 mph, this on roads where the shoulder dips precipitously into steep downslopes at locations, where farm houses sit very close to the flat-outs, and where a safe speed on some of the curves probably shouldn’t even be 55.
Worse, however, was when they reached the city of Morganfield…where the Fusion kept up the pace, and neglected to stop at stoplights and stop signs. The car blasted right through the downtown area, almost striking several vehicles, with the deputy in pursuit and having been joined by Morganfield’s assistant police chief and other deputies.
The Fusion traveled on to Alternate 41 on the other side of Morganfield, headed toward the village of Poole, Kentucky. The Fusion was now clocked at speeds in excess of 120 mph.
In a photo taken by sheriff’s deputies in Union County, Kentucky, this shows what happened to the Ford Fusion with the dealer plates that Marcus Householder was in after it was alleged he robbed GRCB in Shawneetown. The car struck the tanker seen in the photo, which could have erupted in a conflagration.
Just past the Webster County line, and right at the Poole village limits, the Fusion went out of control. It left the roadway, struck a ditch, became airborne…and slammed into the side of a gasoline tanker parked at a CountryMark Oil location alongside Alternate 41.
Authorities were able to get the driver free from the wreckage, identifying him as Marcus Householder, 32, of Henderson.
Householder was transported from the scene by helicopter with unspecified injuries, although as of press time (June 18) it was indicated that they were very serious.
No charges had been filed against him as of that same date, but those being considered were First Degree Fleeing/Evading Police and Wanton Endangerment (both Kentucky felonies), and in Illinois, of course, the bank robbery charges.
Robbery’s timing
The robbery came a little over three weeks after the IDFPR’s Division of Banking returned an order to GRCB regarding “unsafe or unsound banking practices alleged to have been committed by the Bank.”
The order, issued May 24, 2016, after a lengthy investigation by auditors and state and federal agents who scoured GRCB records for months at a location in Harrisburg, notified GRCB that they had a right to have a hearing on the charges and indicates that GRCB has waived those rights.
As such, they entered into a stipulation to the issuance of the consent order with the Division of Banking without admitting or denying any of the charges of unsafe or unsound banking practices…meaning that Grand Rivers, effectively, was found, without any kind of legal proceeding to find it, guilty as alleged by the IDFPR.
What was at issue were 22 points in which the bank was found to have been operating in an unsatisfactory manner according to banking regulations.
Without going into extensive bank reg legalese, the 22 points are covered as follows.
Management: Lil Bill out
The Bank is required within 45 days of the order to “have and retain a qualified President.”
The time period over which the evaluation was conducted covered a time in which Bonan was president of GRCB.
Bonan was either removed from the position, or resigned from it, at some point in time in March or April of this year.
Disclosure called the IDFPR April 5, asking if GRCB were under any kind of an investigation and if there had been any changes to the officers and/or board.
Upon the initial call, Disclosure staff was told that there was an investigation and that there had been changes, but that the IDFPR would have to give them a return call regarding the details.
Upon IDFPR making the return call on April 7, staff was advised that there had “been a mistake made in the answers in the earlier call; there was no investigation.”
IDFPR also advised that they had no information about any changes made to the board.
Currently, Mike Williams, a loan officer at the bank, is acting as president until the bank can comply with the consent order.
The deadline for that is July 6.
Board participation; capital
The consent order makes it clear that the bank’s board of directors must “increase its participation in the affairs of the bank, assuming full responsibility for the approval of sound policies and objectives and for the supervision of all the bank’s activities.”
The IDFPR is requiring monthly meetings of the board, holding reviews of income and expenses; of new, overdue, renewal, insider, charged off and recovered loans; investment activity, etc.
Effectively, the consent order is pointing out that under the Bonan presidency, it appears some things were being hidden from the board members.
The order did not indicate what wasn’t being revealed to the board at the time.
Under the subject of Capital, the bank has 120 days to have and maintain its leverage ratio at a minimum of nine percent and its total capital ratio at a minimum of 13 percent.
The “leverage ratio” is the banking core capital and total assets, the bank’s “financial strength” from a regulator’s point of view. The core capital is primarily considered common stock and disclosed reserved/retained earnings. Capital ratio is the percentage of a bank’s capital to its risk-weighted assets, with “weights” being defined by risk-sensitivity rations whose calculation is dictated under the relevant Accord. Basel II requires that the total capital ratio bust be no lower than eight percent.
The consent order gives a highly-detailed format for increasing capital and how to report each Capital Plan. It also details what should happen if the bank has to sell or liquidate.
Dividend restriction; removal of lending authority
The fourth point in the order is that the bank shall not declare or pay dividend without the prior written consent of the Division of Banking. What this indicates is that the bank cannot pay any board members, nor the holding company….apparently, something that was going on, necessitating mention of restriction.
The fifth point is the removal of the GRCB’s Chief Financial Officer’s lending authority.
GRCB’s CFO was Grady Gaskins, who happens to be the son-in-law of Harrisburg attorney Robert Wilson. Gaskins was removed from his position at the bank at the same time Bonan was, despite his Facebook page making it appear as though he’s still employed, this according to sources from the bank.
In extremely complicated banking division jargon, the fifth point specifies how lending will be done at GRCB following Gaskins’ termination; simply put, no one at the bank can make a loan without IDFPR or bank board approval.
The sixth point, again in banking jargon, appears as if the banking division believes that GRCB was making loans to people, letting the loans go bad, charging them off…then giving loans to the same people who allowed their prior loans to go bad. Called “Prohibition of Additional Loans to Classified Borrowers,” the sixth point strongly restricts any additional credit to or for the benefit of any borrower whose loan or other credit had been classified as “substandard,” “doubtful,” or was listed for special mention during the most recent examination.
Special mention; reduction of delinquencies and classified assets
The seventh point addressed the “special mention” classification of loans: within 60 days of the date of the order, the bank must correct all deficiencies in the loans listed for “special mention” during the recent examination or any subsequent one to be conducted.
While the consent order doesn’t make clear who, exactly, was making these loans that went bad (causing them to make “special mention”), it appears that there was an entire classification of loans being made, being allowed to languish as many as 90 days without payment, then more loans were being extended to these same individuals or businesses.
There is no mention whatsoever in the consent order of who was defaulting on/getting these loans.
The bank was told in the eighth point that they must, within 30 days of the order, begin collection on delinquent/classified accounts, particularly in which each account might be in excess of $100,000. In multiple points and lengthy legalese, the banking division points out the findings that the bank allowed loans to go past due but not attempting to collect nor do anything else about the loan except let it sit.
ALLL; technical exceptions; loan committee
“ALLL” is next addressed in the ninth point, an acronym for Allowance for Loan and Lease Losses. In that point, the bank is being told they have to keep a certain amount of money put back for classified loans that the Federal Deposit Insurance Corporation (FDIC) classifies as “high risk.” The board of directors are being tasked with determining if loans meet the requirements.
Under the tenth point, “technical exceptions,” the bank is being directed to create a plan of how they will handle loans differently and “do better.”
And under the eleventh point, related to the previous several points, the bank is required to have a committee to review loans and ensure they are properly classified, executed, and tended to over the life of the loan.
Previously, Bonan, Gaskins and Whitney Stringer held the positions within that committee.
Stringer is the wife of Doug Stringer, one of the handful Pennsylvania connections that inexplicably have been made with Hamilton County, Illinois, home of the Bonans, over the years.
Another Pennsylvania connection happened to have been former doctor Brian Burns, who is still in jail in Saline County, charged with First Degree Murder in the shooting/dismembering/burning death of his wife, Southeastern Illinois College nursing instructor Carla Burns.
Loan policy; loan review and grading system; budget
The bank was told to “make appropriate revisions to the policy necessary to strengthen lending procedures and abate additional loan deterioration.” It has 60 days from the May 24 date to implement this twelfth point.
Text within the legalese seems to indicate that there might have been someone within the bank who was making loans to himself/herself, but in other people’s names, but no specific name nor position was indicated among the lengthy text addressing this serious problem.
The thirteenth point calls for the bank to develop, adopt, implement and adhere to comprehensive loan grading and review procedures, to be performed by a qualified individual, and executed within 90 days from the effective date on the order.
Sources have advised that because there was nothing like this one already in place, the likelihood that a big fine will be coming is a very good one.
The fourteenth point is for a profit plan and budget, to be implemented in 90 days. The jargon in this one makes it clear that there needs to be a specific person or committee in charge, effectively, of “where the money is going.”
Point fifteen reflects the previous directives, ordering the bank to create a strategic plan within 180 days of the date of the order to “do better.” Under this point, the bank is ordered not to increase its total assets during any consecutive three-month period, without providing at least 30 days prior to the implementation, a “growth plan” to the division of banking. Effectively, the bank is ordered to “stop growing” unless the division says they can…reiterating previous directives about loans, since loans equal “growth.”
Audits; internal routines and liquidity; market risk
Audits are noted in the sixteenth point, and include a requirement to engage an independent third party to complete an annual full-scope audit of the bank’s financial statements, beginning with the period of year-end 2016. No specific mention was made of any time period prior to this.
Point seventeen addresses internal routines; but eighteen pertains to the important “liquidity” – how much cash the bank has to have on hand. The FDIC, as mentioned previously, has to have eight percent; GRCB has to have 15 percent. If they don’t reach these goals, they are considered a “trouble bank.”
Also under point eighteen, the bank will be required to work with the FDIC to pay back their line of credit; that point, unfortunately, is not elaborated upon.
The federal reserve bank that they are ordered to “settle payment transactions through a clearing account balance” is mentioned, however: St. Louis.
The nineteenth point focuses on sensitivity to market risk, as it pertains to loans. Effectively, as per the cited policy statements, the bank was engaging in “risky” behavior by making the loans they were at extremely low interest rates.
Whether this was a competitive maneuver or just a “buddy system” facet of business was not addressed.
Correcting the violations
Points twenty through twenty-two focus on correction of violations; the fact that they must notify shareholders of the consent order and of all the actions required of the bank therein; and the fact that a progress report must be issued to the division of banking monthly in order that the division, and subsequently the IDFPR, knows that GRCB is following the rules laid out for them.
The situation has left some tension in Saline County households, namely, the aforementioned Wilson’s, Gaskins’, and of course, Bonan’s.
Bonan went on a fishing trip after the matter developed into ousting him from the bank in March. He returned, said some people close to him, embittered and at times gnashing his teeth over his misfortune.
His “gentlemen’s club” in Harrisburg, the Chess Club, went into reduced hours; many believed it was because the club had been outed for what it was – and for what it was rumored to be – on the front page of Disclosure in the weeks leading up to it. However, acquaintances of Lil Bill’s advise that it was merely a knee-jerk reaction to what was going on at GRCB.
At about the same time frame (January through April), as many as 16 vehicles were parked at the Bonan Building Center (formerly the SIC Foundation Center, then the Fowler-Bonan Building) located at North Commercial in Harrisburg, these belonging to the Division of Banking investigators poring over the GRCB files regarding loan documents that were located there.
On February 3 of this year, when word was getting around that the investigation was underway, someone started a viral rumor about Bonan being “escorted out of GRCB by feds” that took about two weeks to die down. Disclosure was flooded with inquiries about it, and quickly found it unsubstantiated, but due to the ongoing investigation, chose not to even write about the fact that the rumor was just that – rumor, and worse, false – thus accounting for the lag time in getting the matter quelled.
In Illinois, it’s against the law for anyone to speak or write – including a newspaper – negatively about a bank unless production of such material can be backed up by documentation or a witness with first-hand proof who is willing to take the stand.
In this article about the IDFPR coming down on GRCB, Disclosure happens to have both.
Lil Bill’s HSCA
Another thing Disclosure has would be eyewitnesses to Lil Bill’s irrational behavior as of late.
The day after the bank robbery, Lil Bill, who has rental properties in Saline County, was observed “losing it” to a tenant, a Harrisburg public official told Disclosure staff.
Apparently Bonan was yelling in an unrestrained way at the tenant, who appeared scared and “just kind of took it” from the blustery little man.
Had the incident escalated any further, Disclosure was told, the public official was going to call the law and make a complaint, meaning Lil Bill was moments and probably some choice cuss words away from being arrested.
Bank sources in Harrisburg are advising that because of this Division of Banking Consent Order, the possibility of arrest might be repeated, replete, probably, with swear words.
What this has to do with the alleged bank robbery on June 14 is tenuous, but associates of his, many of whom are admittedly “abandoning ship,” have told Disclosure there has been an unconfirmed rumor, by an unidentified source, that alleges Bill Bonan was overheard saying that because he was ousted from GRCB that he intended to “bring the bank down,” whatever that meant.
That report has not been substantiated. However, the timing of the robbery, alleged to have been perpetrated by a petty thug from Henderson, Kentucky, with a substance abuse problem in a car with dealer plates, has caused more than a few raised eyebrows in and around Saline, Gallatin, Hamilton, Franklin and Jefferson counties.