ОСТ 2 15/7 The Calhoun First National Bank CALHOUN, GEORGIA 30701 September 29, 1977 Mr. Fernand J. St Germain, Chairman Ninety-Fifth Congress Dear Mr. St Germain: In response to your follow-up questions in your letter of September 20, 1977, I should like to submit the following answers: 1. I first became aware that we were holding a fictitious note for the benefit of Mr. Bill Campbell on July 31, 1975, at approximately Noon. At that time I also became aware that Mr. Campbell had vacated the bank and I finally located him at his home in the late afternoon. We called on him at his home, and he admitted several other false entries, forgeries and other matters to us whereupon we came back to the bank and called the FBI, the Regional Administrator of National Banks, our local bonding company agent and the United States Attorney and notified that these matters had been discovered. The Comptroller's office sent representatives here the next morning as well as the bonding company and the Federal Bureau of Investigation, and of course we discussed with them what we already knew. We immediately all set in to try to delve into the total depths of this which it turned out took about six months to uncover. We had many discussions with all of these people about the Campbell matter for quite some time thereafter. The first time that I realized anyone considered that we Mr. St Germain September 29, 1977 2. my testimony on this matter and was informed that it should be kept private which I did. I did not hear any more of this matter at all until the time that the newspapers began to report on it after Mr. Lance was proposed to be named to a Cabinet position in President Carter's Cabinet. To the best of my knowledge our bank was never informed 3. I do not recall ever being served with a subpoena for certain books and records of the bank in September of 1976. 4. I have asked the various other Officers of the bank who might be aware of this, and none of them recall such a subpoena either. The loan deposit ratio of The Calhoun First National Bank on 5. I have no knowledge of the nature of the Comptroller's concern about the item mentioned in Article 13 of the Agreement between this bank and the Comptroller's office. Sincerely, YAHJr:bw Y. A. Henderson, Jr. As you are aware, Members of the Subcommittee indicated in our hearings on September 6 that we would have follow-up questions to your appearance. 1. Calhoun First National Bank filed a claim with its bonding company for losses occurred in the Billy Lee Campbell matter. What was the maximum amount of coverage for such losses in 2. Please provide the Subcommittee with stockholder lists for Calhoun First National Bank for the years 1974 to date. Please include in the list the number of shares owned by each stockholder. 3. Please provide the Subcommittee with a detailed analysis of Calhoun First National Bank's capital accounts for the years 1974 to date. Include in this analysis any major increases in the capital accounts and provide data on the method used to increase that capital (such as stock offerings, retained earnings, etc.). For any stock offerings, please provide the names of the purchasers, the number of shares bought by each purchaser, and the price paid for those shares. Because of ongoing legislative and oversight hearings, your earliest response would be appreciated. Sincerely, FJSTG:mLr Fernand J. St Germain The Calhoun First National Bank CALHOUN, GEORGIA 30701 September 26, 1977 Mr. Fernand J. St Germain Subcommittee on Financial Institutions U.S. House of Representatives Washington, D. C. 20515 Dear Mr. St Germain: As requested in your letter of September 20, 1977, the following answers to the follow-up questions to my personal appearance before your Subcommittee are furnished: 1. The face amount of our insurance coverage under which a claim was filed with our former bonding company in the Billy Lee Campbell matter was $1,700,000.00 during 1975. After considerable litigation by both sides, The Calhoun First National Bank settled with the bonding company for a cash payment of $450,000.00 plus the salvage rights to all loans, agreements and any other other assets of any value supporting these credit extensions which were involved in the matter. Since the settlement date with the bonding company we have collected approximately an additional $195,000.00 from the other assets which were granted us, and we feel that a substantial additional sum is collectible. 2. 3. As requested, stockholders lists of The Calhoun First National Bank for 1974, 1975, 1976 and 1977 are included, and as you can see the computer printout shows the total number of shares owned by each stockholder. The most complete detailed analysis of our capital accounts In June, 1976, a common stock offering was made to our stockholders and 1,313 shares of $2.50 per value common stock were sold. A list of the purchasers of this stock by name and amount is attached, and as you can see on our Mr. St Germain September 26, 1977 financial statements after deducting the selling expenses of approximately $10,000.00, $3,000.00 was credited to the Common Stock Account and the undivided profit account was credited for the excess of proceeds from the sale of our stock over the par value in accordance with regulatory authority approval. This is the only stock offering we have had between the years, 1974 to date. We certainly hope this will complete the information needed from The Calhoun First National Bank in connection with our previous testimony before your Subcommittee. JED/jr/cb Enclosures Yours truly, Jann E. Davis, President |