UPDATE 11:30: Mid-Coast confirms banker Bailey resigned
EARLIER: A Delaware banker has left his job, after a business lender who he formerly supervised pleaded guilty last week to federal fraud charges for concealing bad loans before the collapse of Wilmington Trust Co., the state's largest bank, where the men worked in the late 2000s.
Brian Bailey left Mid-Coast Community Bank, where he was a vice president and business lender, the day after Joseph Terranova pleaded guilty to concealing bad loans when he was a lender at Wilmington Trust Co. Terranova was accused by federal prosecutor Charles Oberly of repeatedly extending loans to Dover developer Michael Zimmerman and others and hiding them from bank financial reports and government bank examiners after Zimmerman and other borrowers failed to pay the money back on time.
Bailey was not charged or named in Oberly's report on the Terranova case, made public Wednesday (see link in previous item). From his past job title as head of Wilmington Trust business lending, he was readily identifiable as Terranova's boss who approved his actions on a number of loans the government says were improperly extended and accounted for.
UPDATE: "Brian did resign Thursday. There's nothing we can say about the circumstances at this time," Brian Novacich, assistant vice president at Mid-Coast, told me, after I confirmed Bailey's departure with other sources familiar with the situation, and called Mid-Coast president Jim Ladio seeking comment. A message left at Bailey's home was not immediately returned.
EARLIER: Mid-Coast announced plans earlier this year to be acquired by Bryn Mawr Trust Co. "We’re not involved at all" in Bailey's departure or any other review of former Wilmington Trust employees at Mid-Coast, Bryn Mawr Trust chief executive Ted Peters told me. "They won't be joining us til next fall."
Peters defended the deal and said Bryn Mawr Trust knew very well what it was buying: Mid-Coast "is a high performer, with great loan quality. Ladio’s going to head up all our efforts in Delaware." The acquisition will make Bryn Mawr Trust the third-largest locally-based lender in Delaware, behind WSFS Bank and almost equal with Artisans Bank, Peters added.
Wilmington Trust was taken over by M&T Bank of Buffalo, N.Y. three years ago at a fire-sale price to prevent its financial collapse after $1 billion in loan losses all but wiped out the company's capital base and forced it to seek a government bailout. Pittsburgh-based PNC, San Francisco-based Wells Fargo, Canada-owned TD Bank and British-owned Citizens Bank also have branch networks across Delaware.
Peters also told me he plans to retire at the end of 2014 and run a bank hedge fund, which he says will raise more than $25 million "to take small positions in around 20 publicly-traded" banks including takeover and turnaround candidates, as well as some small banks with rapid earnings growth.