Audit Report. Safety and Soundess: Failed Bank Review of Turnberry Bank. Office of Inspector General, Washington, DC. Office of the Inspector General.

摘要

The primary causes of Turnberry’s failure were its (1) aggressive growth strategy, (2) excessive concentrations in higher-risk loans which included multifamily, nonresidential real estate, construction, land, and nonmortgage commercial loans, and (3) insufficient capital relative to the risk level of its loans. These conditions were exacerbated by the downturn in the real estate market in South Florida. In addition, Turnberry did not make appropriate enhancements to risk management to support the growth in its niche lending in residential condominium loans. For example, management did not establish concentration limits for condominium loans. These factors combined with the declining real estate market in South Florida resulted in significant increases in its problem loans and loan losses. In turn, these loan losses significantly diminished earnings and capital and, ultimately, led to Turnberry’s failure.