TierOne Bank was closed Friday and taken over by the Federal Deposit Insurance Corporation. TierOne, based in Lincoln Nebraska, with about 2.8 billion dollars in assets, had 69 branches in 3 states with the majority of those in Nebraska. The FDIC then entered into an agreement to sell the assets and deposits of the failed bank to Great Western Bank, based in Sioux Falls, South Dakota.
The FDIC waited until after TierOne branches in the mountain time zone had closed on Friday, before announcing the closing.
According to the FDIC, all 69 branches of TierOne Bank reopened beginning Saturday as branches of Great Western Bank. The FDIC said all depositors of TierOne Bank will automatically become depositors of Great Western Bank. Deposits continue to be insured by the FDIC.
TierOne had been one of Nebraska’s top home mortgage lenders, but got caught up in the nationwide real estate bubble when it opened loan production offices in markets such as Las Vegas, Phoenix and Florida. These out-of-market loans had a high default rate when real estate prices collapsed in those regions.
Great Western Bank had originally reached an agreement to buy 32 of the TierOne branches last year, including area branches in Ord, Burwell, Broken Bow, St. Paul, O’Neill, Callaway and Albion but that deal was rejected by the regulators.
The FDIC also shut down two smaller banks on Friday. One in Rosedale Mississippi and one in Arcola, Illinois. The TierOne Bank is the only failure in Nebraska this year and the first since Sherman County Bank in Loup City was closed down in February of 2009 as a result of improper commodity trading.
Customers who have questions about the transaction can call the FDIC toll-free at 1-800-830-4732. The phone number will be operational this evening until 9:00 p.m., Central Daylight Time (CDT); on Saturday from 9:00 a.m. to 6:00 p.m., CDT; on Sunday from noon to 6:00 p.m., CDT; and thereafter from 8:00 a.m. to 8:00 p.m., CDT. Interested parties also can visit the FDIC’s Web site at http://www.fdic.gov/bank/individual/failed/TierOnebankne.html.
For the FDIC’s complete press release go to this link: http://www.fdic.gov/news/news/press/2010/pr10132.html