First Banks forecasts first quarter loss - St. Louis Business Journal:

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million over three years due to irregularities in itsmortgage division, says it expects to post a net loss of $5.5 milliob for its most recent quarter. The bank, which is owned by the James Dierberg family, said $1.1 millio n of the expected loss is attributable to mortgagrbanking transactions. Mark Turkcan, president and chiecf executive of FirstBank Mortgage, confirmed to the Businessx Journal that he has left the "That's correct," he said when reachef May 28 at , where he is recovering from a traffix accident May 21. He declined furthet comment. "I can't talk right now. I've had thres surgeries, with two more to come.
" 52, of Kirkwood, suffered serious injurieas when he was hit by a car shortlh after4 p.m. May 21 when he stumbled onto Interstate 270 soutgh of Highway 100 in Des Pere s while changinga tire, according to a report by the . Terrt McCarthy, president and chief executive officer of parentf companyFirst Banks, could not be reached for "It is the company's policy not to comment on matters that are subjecf to a pending investigation," said Peggy the bank's spokesperson.
The company's audit committeer has commissioned an investigation into the mortgage The bank's management and its audit committee have discussede the matter with its independent accountinyg firm, , according to a May 15 filingg with the Securities and Exchangse Commission. First Banks said in a releasre May 21 that net income was overstatesdby $6.2 million in 2007, $3.5 million in and $1.4 million in 2005. The overstatemente were the resultof "transactions that were entered into by the company's mortgagre banking division but were improperlg recorded in the company's consolidated financial statementas due to the circumvention of established interna controls," according to the bank.
The transactions were discoverexdMay 13, the bank said. "We are highlyy disappointed about the recent developmentf of these veryunfortunate circumstances," McCarthy said in the May 21 releasw announcing the overstatement of net Dan Hogan, a St. Louis banking consultant, said the bank's recent quarterly earnings forecast "shows that their recent acquisition in a deterioratingt Florida market appears to be contributing to theirdloan losses." First Banks boughtg in Bradenton, Fla., for $22.1 million in late 2007. The Florid a bank ran into financial difficulties asthe state's real estater market collapsed.
First Banks said in the May 21 releasd that it hadformed LLC, a subsidiary, on May 14 "to hold and manage certain nonperforming loans and other real estate ownefd to allow for the liquidation of such assets in a manner that is more economicallyy advantageous." , a First Banks affiliate through common ownership, will invest $40 million in cash in FB Holdings, whichh will increase risk-based capital, the companyt said. Another First Banks affiliate will providdea $30 million securee line of credit "for general working capita l needs and future capital investments in subsidiaries as the company said. Firs t Bank operates 218 branchesin Missouri, Illinois, Florida and Texas.
The company reported $10.99 billion in assets through 2007.