Community Central Bank in Mt. Clemens, Michigan, which was headed up by allegedly-murdered banker David Widlak, is on the brink of collapse.
In an SEC filing released yesterday, the bank revealed its deposits had nosedived since Widlak disappeared in September.
Its finances are now so depleted that the bank’s “ability to continue as a going concern is in substantial doubt.”
In the regulatory filing, the bank’s acting CEO said:
Mr. Widlak played a critical role in our ability to identify and consummate a strategic transaction, including a capital infusion, a merger or sale of the Corporation or Bank.
Unless we return to profitability or identify and execute a viable strategic alternative, it is unlikely that we will be able to continue as a going concern.
In the third quarter Community Central, which described itself as “significantly undercapitalized” in the report,
- Lost $4.8 million ($1.31 a share), double the net loss of $2.4 million that the it had suffered in the previous year.
- Saw its deposits sink by $32.6 million (7.6%) between June and September. The bank believes that $9.4 million of that is specifically due to “activity related to the disappearance and death of the CEO of the Bank” – ie. despositors were freaked by all the negative publicity and withdrew their money.
- Has $39.8 million in nonperforming loans, most of which involve commercial real estate.
The bank warned that because of its “significantly undercapitalized” status, regulators may begin “additional enforcement actions” – placing the bank into receivership – at any time.
It’s now been a month since David Widlak’s badly decomposed body washed up at the edge of a lake in Michigan, one month after he disappeared, and his death remains mystery.
Spare the fact that an autopsy revealed he died because of a bullet wound to the back of his head, very little else is known. Though the consensus is that the 62-year-old was shot execution-style, investigators are still fumbling around for the full story.
There were suggestions that the bank’s faltering finances might have been connected to his death, but an “outside audit of the bank found no evidence of any missing money or other fraudulent activity.”
In fact, Widlak’s family has even been encouraged to hire a private investigator, because so little has been uncovered.
Also, the Detroit Free Press reports that Community Central is under pressure to increase its stock price above $1 a share – at the moment its teetering at 48 cents; “otherwise, the company’s shares will be removed from trading on the NASDAQ Stock Market.”