The Nebraska Department of Banking and Finance has closed a troubled state-chartered bank.
The Nebraska Department of Banking and finance announced it closed Ericson State Bank at 4 p.m. Friday, Feb 14 because it was insolvent, following the bank's need for capital that went unmet.
“The failure of Ericson State Bank resulted primarily from large out-of-territory commercial loan losses and poor management practices, which led to a deterioration of the bank’s capital," Banking Department Director Mark Quandahl said in a news release. "When the capital was not replenished, the department was left with no option but to put the bank in receivership.
The Federal Deposit Insurance Corporation has been named the receiver of the bank and has entered into a purchase and assumption agreement with Farmers and Merchants Bank, which is based in Milford. The sole branch of Ericson State Bank, in the Wheeler County village of Ericson, will reopen Tuesday under that name.
The Bank already has plans in place to create a seamless transition for the community.
“We’re a small-town bank and the needs of our customers and communities are always our top priority,” said Gerry Dunlap, President and CEO of Farmers & Merchants Bank. “We have very high standards when it comes to customer service. Above and beyond is what we do every day.”
It is a positive turn of events for the town of Ericson. Ericson State Bank employees will be retained, so customers will continue to see familiar faces when they walk in the door. In addition, Farmers & Merchants Bank has assumed all of the deposits of Ericson State Bank, which means all insured deposits are safe.
The new ownership will bring excellent customer service, helpful financial products and advice, plus online banking and advanced mobile technology to the community. Farmers & Merchants Bank offerings will include 20-year fixed-rate real estate loans and competitive checking account options. Our easy-to-use Mobile Banking App allows customers to deposit checks with a smart phone, transfer money from debit card to debit card or to an account at another bank and to “turn off” a debit card for security reasons. All in all, the acquisition is a win-win for Ericson!
“If you have any questions or concerns, we’re here for you. I’m here for you,” Gerry emphasized. “We are proud to be a part of Ericson and already feel welcomed.”
Farmers & Merchants Bank is a family-owned, chartered institution with a rich history going back to the M.W. Dunlap family in 1921. Rooted in Nebraska, it is a financial cornerstone of many of our state’s fine communities.