Anatomy of an insider deal: the Military Trail property. (Suburban Bank of Lake Worth's purchase of office building in Military Trail, Lake Worth, Florida)

John Mercurio thinks the assault by regulators on Suburban Bank of Lake Worth, where he is a director and stockholder, is not fair. He thinks it only makes sense for banks to do business with directors.

Among the deals that Mercurio has consistently defended is the purchase by his bank of a branch office on Military Trail in Lake Worth, a building that he and fellow bank officer Robert Brannan once owned.

But that one deal and its convoluted history over the past decade typifies the kinds of insider bank loans that have led to increased regulation in the financial industry.

At question is whether it is proper for a bank's officers and directors to effect the sale of personal property to their bank -- a bank which had been losing money -- with the result that they are personally saved from imminent default on a $1.9 million loan.

Mercurio says he believes it is.

"Federal regulators are trying to make it impossible for directors to do business with their banks," says Mercurio. "If I were in the car business, and it was up to the way they …