Mortgage Daily Logo

103-Year-Old Institution Among 2 Bank Failures

Mortgage News

State regulators in Minnesota and Missouri last week closed a pair of banks, including one that had been around for more than a century. Losses associated with the two failures are expected to reach nearly $190 million.

In the town of Wyoming, Minn., the Minnesota Department of Commerce seized and closed The RiverBank Friday.

The former institution was established in 1908 and became insured by the Federal Deposit Insurance Corp. in 1934.

The RiverBank had 108 employees as of the end of June, and its deposits were $379 million. Total assets of $417 million included $74 million in residential loans, $32 million in construction-and-development loans and $146 million in commercial real estate loans.

The FDIC — which issued a cease-and-desist order against The RiverBank in March 2009 and a $3,750 civil money penalty against it in November 2008 — was named receiver of the depository institution. Central Bank was the winning bidder for the failed bank, and it negotiated an FDIC agreement to share in losses on $339 million of the acquired assets. After all is said and done, the Deposit Insurance Fund is expected to be out $71 million.

After that, the Missouri Division of Finance took possession of Sun Security Bank.

Management of the bank had been unsuccessful in its efforts to find capital, and attempts to find a buyer were fruitless. So the board of directors turned Security Bank over to the state with the FDIC being named receiver.

The closed institution commenced business in 1970. At the end of the second quarter, headcount at Sun Security stood at 119 people.

Home loans owned by the bank were $74 million. Another $75 million in CRE assets were on the balance sheet, and C&D holdings were $35 million.

“The demise of this bank is the result of management’s aggressive lending decisions, which concentrated loans in commercial real estate and development projects,” Missouri Commissioner of the Division of Finance Richard J. Weaver said in the news release. “Many of these projects failed and losses were realized. These losses and the ongoing expenses of collecting and disposing of the foreclosed properties are more than the bank can support.”

Sun Security had operated under close regulatory scrutiny since 2007. It was hit with $21,400 in FDIC civil money penalties in February 2009, an FDIC cease-and-desist order in October 2008, another C&D order earlier that year and a civil money penalty not long before that.

Great Southern Bank reached an agreement to assume the Ellington, Mo., bank’s $290 million in deposits. It also agreed to acquire $356 million in assets, though the FDIC will share in losses on $352 million of the assets — an unusually high proportion for a loss-share agreement.

The failure of Great Southern, the 76th FDIC-insured failure during 2011, will cost a projected $118 million.

Mortgage Daily has reported on 107 mortgage-related businesses or companies that have stopped doing business or failed thus far in 2011.

Related Posts

Centex Home Equity Announces Name and Brand Change to National Mortgage, LLC

Third-Quarter 2012 Mortgage Litigation Index

Lawsuits involving excessive fees, servicing fees and loan fees beyond state maximums. Defendant Plaintiff Court Amount Overview Case Title Case Number Date Filed Date of Activity Link to Story Fannie Mae and Freddie Mac Orangeburg County, Richland County, South...

Centex Home Equity Announces Name and Brand Change to National Mortgage, LLC

Net Branch Lawsuits

Litigation involving net branch operations. Defendant Plaintiff Court Amount Overview Case Title Case Number Date Filed Date of Activity Link to Story PHH Mortgage Corp. Mathews Supreme Court of Virginia na Court held that the term "branch office" includes not only...

Centex Home Equity Announces Name and Brand Change to National Mortgage, LLC

Whistleblower Lawsuits

Litigation related to loan servicing, including escrow issues, transfer of servicing and servicing borrowers in bankruptcy and foreclosure.   Defendant Plaintiff Court Amount Overview Case Title Case Number Date Filed Date of Activity Link to Story Bank of...

Popular posts

How Long Does It Take to Refinance a Mortgage
How Long Does It Take to Refinance a Mortgage

So, you’re interested in refinancing your mortgage. Maybe you want some extra capital to do that home project you’ve always dreamed of, interest rates are nearing record lows, or you want to start consolidating debt. Regardless of the motivation behind the refinance,...

How Does Refinancing a Mortgage Work
How Does Refinancing a Mortgage Work

A home purchase is considered an investment, and a robust one at that. Savvy owners are constantly looking for new ways to reduce debt, save money, pay less in interest, and ultimately build equity. Refinancing is one way to leverage your investment and do just that....

What Does It Mean to Refinance Your Home
What Does It Mean to Refinance Your Home

You can think of refinancing your mortgage as a debt redo. Essentially, you’ll swap out the existing loan for a new one - ideally with better terms and conditions. Only this time it could help you save money on high mortgage payments, rather than just borrow it....

Setting up the Utilities in My New House
Setting up the Utilities in My New House

All the tedious, time-consuming paperwork has been signed, sealed, and delivered. Your belongings are packed into what seems like a million boxes and you have a solid plan to haul all your existing furniture to the new place. Just as your boxes and furniture need to...

When Is My First Mortgage Payment Due?
When Is My First Mortgage Payment Due?

Navigating your way through a brand-new mortgage loan can be a difficult task, especially for first-time homeowners.   After handing over a large sum of money for the down payment and closing costs, it’s important to pay attention to the timing of your first...

Newsletter

Don’t worry, we don’t spam