But in interviews with regulators, former employees, customers and people involved in Suburban's dealings, a more complicated picture emerges.
For the first 50 years of its existence Suburban Federal led a relatively benign existence. Among its more remarkable business moves were the takeover of parts of failed rivals, including Annapolis Federal Savings in 1991, and its move from Prince George's County to a new corporate headquarters in Crofton in 2001. It focused on managing deposits and making loans to existing customers.
Then, around the time that Morrison Junior, the founder's grandson, was installed as chief executive in early 2004, the bank's ambitions changed. It acquired Westview Savings Bank, a smaller thrift in Baltimore, to expand north. And most importantly, it opened satellite loan offices in Timonium and Northern Virginia, hoping to exploit the burgeoning market for real estate loans.
FOR THE RECORD - An article Sunday about the collapse of Suburban Federal Savings Bank erroneously included a photo on News page 12 of an Ellicott City home that had no involvement with the failed bank.
THE BALTIMORE SUN REGRETS THE ERROR
At those offices, regulators said, Suburban shifted into a faceless mortgage lender whose customers included anyone that loan officers and affiliated brokers could find.
One loan officer who spoke with The Baltimore Sun said that early on they were scrambling just to make a living, which seemed unconscionable, given the easy money everywhere else. Competitors were loosening standards and reaping profits in the mortgage business as Suburban offered conservative loan products with uninspiring interest rates.
Loan officers complained to top management that "we're losing loans right and left. We can't make a living," the loan officer, who wanted to remain anonymous because she is still in the banking business, recalled in an interview this week. "We had to compete."
Management relented and started offering more innovative loan products with relaxed terms and little or no credit or documentation required. It also began making considerably larger loans, often to customers it didn't know, in areas where it did little or no banking business.
Federal regulators, who conduct regular audits and on-site reviews of banks like Suburban, said the first signs of trouble surfaced quickly in 2005. Examiners saw an increasing number of mortgage loans on the bank's books that were not backed up with clear documentation of the borrowers' finances. The number of late and delinquent loans soared from $920,000 at the end of 2005 to more than $8.2 million a year later, according to documents filed with the Federal Deposit Insurance Corp. Eventually, that figure would reach $55 million, more than 15 percent of the bank's assets.
