First National Bank of Northfield

The Office of the Comptroller of the Currency (OCC), the Federal agency that regulates nationally-chartered banks like FNB, has a statement posted to their website that says in part:

The Comptroller has found unsafe and unsound banking practices relating to asset quality and credit risk management at the Bank.

and then follows this with ten pages of corrective actions FNB has agreed to take.

FNB CEO Dave Shumway posted a letter on the bank’s website at 10 am this morning. VP Rick Estenson sent out this press release (PDF).

To FNB’s credit (and their PR firm, Neuger Communications Group), they got out ahead of the news coverage on this by contacting local media (LoGroNo, Nfld News, KYMN) several days ago, telling us what was going on and asking us to embargo the story until 10 am today when the OCC was to release its statement.

But it’s difficult to reconcile the language used by the OCC, which sounds sort of harsh and ominous, with the language used by Shumway, Estenson and Neuger which sounds like the intervention is a minor tap on the wrist and everything is fine.

Federal regulators are under the gun since the financial meltdown so maybe now they have to sound tough, a CYA strategy in case the shit really hits the fiduciary fan. And banks probably don’t want to publicly feud with their regulators.

Other Minnesota national banks to reach ‘formal agreements’ with the OCC include the First National Bank of Cold Spring, The First National Bank of Le Center, Neighborhood National Bank, Alexandria, and Peoples National Bank of Mora.

FNB is owned by Heywood Bancshares, “a one-bank holding company located in Northfield” according to the OCC.  It’s not clear who the shareholders are who have infused “$700,000 of additional capital” in the past quarter.