Northern Star Financial, Inc. Reports Regulatory Agreement
September 04 2009 - 1:34PM
Marketwired
Northern Star Financial, Inc. (OTCBB: NSBK) the parent company of
Northern Star Bank announced today that Northern Star Bank has
entered into an agreement and consented to the issuance of an order
by the Federal Deposit Insurance Corporation ("FDIC") to take
affirmative actions in order to improve and strengthen the bank's
operations.
The order cites weaknesses in bank operations and condition,
including inadequate management, capital and earnings, excessive
loan losses and an excessive level of adversely classified loans.
The order alleges that the bank is operating with an inadequate
allowance for loan losses, hazardous lending and lax collection
practices and an inadequate funds management policy and loan review
system. The order requires, among other things, that the bank
improve earnings and capital levels, develop a management plan,
increase board participation, improve funds management practices,
reduce concentrations of credit, improve lending and collection
practices and policies, increase its allowance for anticipated loan
and lease losses and adhere to regulatory restrictions on
inter-company payments. The bank entered into the agreement without
admitting or denying any charges of unsafe or unsound banking
practices and violations of laws or regulations.
Northern Star Bank President and Chief Executive Officer, Tom
Stienessen said: "The deterioration in the commercial real estate
markets has resulted in an unprecedented decline in the value of
real estate contributing to the challenges the bank otherwise faces
in recessionary times. While there is a lot of second guessing and
finger pointing by congress and regulators, banks and bankers are
required to deal with the here and now. We are diligently working
with the FDIC to address the requirements and concerns included in
the agreement and the order. This process is designed to improve
stability and the operation of the bank and help us in this
challenging time."
Stienessen reported that the bank is considered "Well
Capitalized" by regulatory standards and the bank is participating
in the FDIC's transaction account guarantee program in which all
funds in non-interest bearing transaction deposit accounts will be
protected in full. This insurance coverage on non-interest-bearing
transaction accounts is over and above the $250,000 coverage
already provided to customers by the FDIC. The coverage will last
through December 31, 2013.
The Company commenced operations on January 25, 1999 as a bank
holding company whose subsidiary provides financial services.
Northern Star Bank's business is that of a financial intermediary
and consists primarily of attracting deposits from the general
public and using such deposits, together with borrowings and other
funds, to make secured and unsecured loans to business and
professional concerns and mortgage loans secured by residential
real estate and other consumer loans. The Bank operates two
full-service offices that are located in Mankato and St. Cloud,
Minnesota.
THIS PRESS RELEASE CONTAINS FORWARD-LOOKING INFORMATION AND
ACTUAL RESULTS MAY DIFFER.
Statements that Northern Star Financial may publish, including
those in this announcement that are not strictly historical, are
"forward-looking" statements made under the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are inherently unreliable and actual
results may vary. Factors which could cause actual results to
differ from these forward-looking statements include changes in the
competitive marketplace, changes in the interest rate environment,
economic conditions, outcome of pending litigation, risks
associated with credit quality and other factors discussed in the
Company's filings with the Securities and Exchange Commission. The
Company undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
Contact: Thomas Stienessen Chief Executive Officer (507)
387-2265
(USOTC:NSBK)
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