A 108-year old bank closed last week, as did an institution that had more than $300 million in assets. Losses tied to the two bank failures are projected at $70 million. The upcoming closing of an appraisal management operation is expected to result in minimal layoffs.
Polk County Bank was seized by the Iowa Division of Banking on Friday. The state indicated that the Miller family was unable to raise needed capital to avoid the closure.
The financial institution operated in Johnston, Iowa. It was established in 1903, and 33 people worked there when it collapsed.
Residential loans owned by the bank were $20 million as of June 30, while commercial mortgage holdings were $18 million and construction-and-land-development loans on the books were $6 million.
“The bank had experienced significant growth in its real estate lending portfolio,” James M. Schipper, superintendent of banking of the State of Iowa, said in a news release. “The growth combined with the recession led to asset quality problems that resulted in heavy losses and depletion of the bank’s capital.”
The Iowa District Court for Polk County issued an order appointing the Federal Deposit Insurance Corp. as receiver. The FDIC had issued a cease-and-desist order against the bank in October 2008. In addition, the bank was hit with an FDIC civil money penalty in the amount of $18,095 this past June.
Following a secret bidding process, Grinnell State Bank assumed the failed bank’s $82 million in deposits and purchased all of its $92 million in total assets.
The FDIC has put losses to its Deposit Insurance Fund at $12 million as a result of Polk County Bank’s failure.
Over in Lacombe, La., Central Progressive Bank was placed into conservatorship by the Louisiana Commissioner of Financial Institutions and handed over to the FDIC as receiver. It was only the second bank to fail in the state during the current economic cycle.
Founded in 1967, Central Progressive had 160 employees. Its home-loan holdings were $35 million, while it also owned $88 million in commercial real estate loans and $103 million in construction-and-development assets.
Richard S. Blossman Jr. of Central Progressive was banned by the FDIC from the banking industry in December 2010, while Dwayne G. Deer faced an FDIC removal-and-prohibition order in July 2009. The FDIC issued a cease-and-desist order against the company in January 2009 and terminated a cease-and-desist order the following month.
The FDIC awarded the winning bid for Central Progressive to First NBC Bank, which assumed all of its $348 million in deposits and acquired $354 million of its $383 million in total assets.
The FDIC expects to take a $58 million hit as a result of Central Progressive’s demise — the 90th FDIC-insured failure this year.
Mortgage Daily has tracked a total of 126 mortgage-related businesses to close or fail so far in 2011.
Bank of America Corp.’s appraisal management company, Landsafe is closing down the division of the company that services outside mortgage brokers on Jan. 31, a spokesman confirmed in a statement. The company will only deal with BofA’s business. He said that layoffs tied to the elimination of the third-party unit will be “minimal.”
