State regulators shutter Evergreen State Bank
According to a news release by the FDIC, the shutdown protected the bank’s depositors. Under an agreement linked to the closure, the FDIC will transfer all of Evergreen’s deposits to McFarland State Bank, McFarland.
The transfer means that the bank’s four branches, which are located in Stoughton, Janesville and Sun Prairie, will reopen today as branches of McFarland State Bank. Customer accounts will still be insured by the FDIC.
The FDIC said customers of the former Evergreen State Bank can access their money this weekend by writing checks or using ATM or debit cards. Checks drawn from the bank will continue to be processed, and loan customers should make their payments as usual.
The FDIC said former Evergreen State Bank customers should continue to use their existing branches until McFarland State Bank sends notification of changes that will allow customers to use other branches as well.
Evergreen’s closure Friday might have come as little surprise to insiders. The FDIC had issued a supervisory corrective action to Evergreen on Dec. 10, telling the bank to either sell enough of its voting shares to recapitalize the bank or to find another bank to buy it out.
In the action, the FDIC called the bank “undercapitalized,” stating that the bank’s financial condition had “continued to deteriorate,” and the bank had “not demonstrated the ability to return to … a safe and sound condition.”
The action was not made public by the FDIC until Friday, shortly before the bank was shut down.
The news Friday was the final chapter in months of woes for Evergreen, which had been plagued by losses for the last two years.
Financial figures published through Sept. 30 showed Evergreen had a net loss of $21.1 million in the first nine months of 2010, with assets of $246.5 million, the Wisconsin State Journal reported.
A year earlier, the bank had lost a total of $2.9 million and listed assets of $285.9 million.
The FDIC estimated Evergreen’s failure would cost the Deposit Insurance Fund $22.8 million.
The 112-year-old bank was the fourth Wisconsin bank to fail since the start of the economic downturn, the Milwaukee Journal Sentinel reported.
The last FDIC-insured bank to close in the state was the First Banking Center, Burlington, on Nov. 19.