Aaron Johnson stepped down as president and CEO of Carnegie, Okla.-based Farmers Bank in the middle of a bank examination which later resulted in a consent order from the Federal Deposit Insurance Corp., OKCTalk.com reported.
David Braly succeeded Johnson, the report said, citing a Feb. 11 Instagram video.
Following the leadership change, the FDIC on March 21 issued a consent order against Farmers Bank for its alleged unsafe or unsound banking practices, relating to capital, management, loan policies, classified borrowers and allowance for loan and lease losses.
The bank did not admit or deny the charges.
Farmers Bank then hired an independent accounting firm to investigate expenses charged to the company's credit card, wherein Johnson allegedly made personal charges amounting to $398,289. The bank filed a lawsuit against Johnson related to the matter.
While Johnson has already repaid $371,000 of the charges, he has yet to settle $47,948.13, including interest, the report said.
Additionally, Robert Smith and Gregory Smith, minority shareholders in the bank's parent, Farmers Bancapital Corp., also filed a suit against Johnson and his father, Larry Johnson, as chairman of Farmers Bancapital, for their failure to pay $1.5 million in loans dated July 24, 2018.
The Smiths claimed that the Johnsons used their stock in the bank as collateral for the loan, even though the stock was already pledged to another loan from another lender.
Both Aaron Johnson and Braly did not respond to calls, OKCTalk.com said.