Feds intervene at Community Resource Bank

Community Resource Bank logo 
A story on Community Resource Bank was posted to the Strib web site at 9 pm this evening: Bank in Northfield put under Fed scrutiny.

Federal regulators have ordered Community Resource Bank of Northfield, Minn., to strengthen its loan portfolio and ensure that it has adequate capital. The 132-year-old bank, which has $240 million in assets, must improve its loan review process and reduce its delinquent loans that have balances exceeding $500,000. The bank also was told to come up with a plan to "maintain sufficient capital."

Update: 01/27, 6:50 am: 15-page PDF: Written Agreement by and among NORTHFIELD BANCSHARES, INC. Northfield, Minnesota COMMUNITY RESOURCE BANK Northfield, Minnesota and FEDERAL RESERVE BANK OF MINNEAPOLIS Minneapolis, Minnesota

… But the bank appears to have a healthy cushion to absorb these loan losses. Unlike many banks that have been hit with regulatory actions, Community Resources’ equity — or its cushion against future loan losses — has improved during the economic downturn… Kuehnast, the bank’s CEO, said most of the loan problems are confined to commercial real estate, primarily loans to small businesses backed by property they own. The bank, he added, did not get swept up in the housing boom; construction and development loans represent only a small portion of the bank’s overall balance sheet.


  1. Ross Currier said:

    These are tough times for Main Street businesses, including banks. While Wall Street Financiers and their customers (packagers of obscure debt products) get Federal bail-outs, Main Street Financiers and their customers (small, local businesses) are left to work it out with little or no help.

    It is no surprise that one of our community’s banks, which has been investing in small, local businesses for over a hundred years, is currently facing challenges as property values drop and sales incomes decline. In my opinion, dramatic headlines add nothing positive to the situation.

    I wish the best to this institution that is so important to the Northfield economy.

    January 27, 2010
  2. Kiffi Summa said:

    I know nothing about the overall solvency or practices of the Community Resource Bank … but I find it infuriating that the Federal Gov’t did not have the pure old fashioned gumption to regulate the ever increasing zeal with which the giant banks developed exotic financing products, not just mortgage schemes but credit card offers, and then sold them to a gullible public.

    The Mega-banks led the way; I would have to doubt that any of our local banks, even the ones with larger affiliations, were as reckless.

    So now the giant banks… labeled “too big to fail” have gotten away with virtual ‘murder’ of our economy, and smaller banks will pay the price of the new regulatory oversights and inspections and evaluations, while they struggle to continue to serve their small town communities.

    No wonder none of the local banks are loaning to small business owners now; that is the complaint in various segments of the business community.

    ***Who is to take the risk that must be taken for small businesses to survive in hard economic times***

    I would say the EDA should implement some of the several small working capital loans that have not been able to get out of their committee and be passed by the full Board.

    It appears to be impossible to impact the reputation of the Mega-Banks and their Credit Card Empires, but a story like this can hurt a small bank. They are not invulnerable.

    January 27, 2010
  3. Jane Moline said:

    Regulators have a responsibility to provide public information on the banks they regulate. Don’t shoot the messenger

    It really is sad that the financial institutions “too big too fail” made investment decisons that had such awful repurcussions for our economy have not had to pay for the damages they caused. Derivitives were not invented or thought of as an attractive investment at Community Bank, but the economic crash took a bite out of Community and other small banks.

    You can make a difference. If you bank with a financial institution “too big to fail” make a decision to move your deposits and your business to a small, local bank. Increasing deposits at smaller banks strengthens that bank and makes it better able to weather these uncertain times. If you have the choice and chance, move your credit cards to smaller, local credit providers rather than Citibank, Bank of America or other large “too big to fail” institutions.

    January 27, 2010
  4. Kiffi Summa said:

    Jane: Very good suggestion on moving accounts , and especially credit cards, to smaller banks and banking credit systems.

    The consumer might be able to accomplish something the Federal gov’t didn’t; how many people across this country have credit cards with Citibank or bank of America?

    January 27, 2010
  5. Tracy Davis said:

    Jane, can I say “Amen!” 🙂

    January 27, 2010

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