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Acceptance Loan looking into car loan 'irregularities' at unidentified branch Thomasville-based United Security Bancshares has acknowledged that it is looking into irregularities of loan fraud in its subsidiary, Acceptance Loan Co., and has launched an internal investigation. The fraud reportedly totals at least $3.8 million. The activity is related to fraudulent loans or fraudulent handling of repossessed automobiles, mostly in two unnamed branches, the company said. The branches are reportedly at an upstate location and not in south Alabama. Acceptance is a subsidiary of First United Security Bank and United Security Bancshares is a Delaware-based holding company over FUSB, with its corporate offices in Thomasville. In a statement, the bank said: "The irregularities appear to be primarily limited to two ALC branches and largely related to the making of improper or fraudulent loans and the improper or fraudulent handling of repossessed automobiles. The company has initiated an internal investigation with the assistance of outside legal counsel, as well as an outside forensic accountant. At this time the company has not completed its review of the financial impact of the irregularities, or the extent to which any losses will be covered by insurance or recoverable in a civil action. At this point of the investigation, the company has identified approximately $3.8 million of potential losses. The company is also assessing potential additional losses from loans where potential delinquencies have not been identified due to the irregularities. Upon discovering the irregularities, the Company discussed the matter with its independent auditors and notified the Chairman of its Audit Committee." President and Chief Executive Officer, R. Terry Phillips, said, "I want to assure our shareholders that we are taking this matter extremely seriously and are working diligently, along with outside experts, to perform a full and complete investigation. We are committed to meeting the highest standards in all aspects of our business and remain focused on providing our customers with quality products and services at the highest level of customer service. We have taken appropriate actions at the identified ALC branches in question to ensure that these activities have ceased." According to Hoover's, a business information web site, Acceptance Loan has about two dozen offices in Alabama and Mississippi. FUSB had a total revenue of $45.1 million for the year ending December 2006.
USBI is a popular local bank stock. Late Tuesday, shares were trading for $25.49. The price is has dropped some since the investigation was announced. Shares have traded as high as $30.68 in the past year.
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