Two Southeast Nebraska banks have agreed to buy a troubled bank in a three-way merger.
Eagle State Bank of Eagle and Tri Valley Bank of Talmage said Friday that they intend to merge. The merged entity will then purchase the assets of Ericson State Bank.
The Ericson bank last month was hit with a consent order from both federal and state banking regulators.
According to the order from the Nebraska Department of Banking and Finance, the bank on numerous occasions exceeded statutory lending limits, with a number of the loans going to a relative of the owners.
The banking department determined that the violations were serious enough that it required owners Jack and Debra Poulsen to resign from the bank and its board of directors, and it also required Jack Poulsen to surrender his executive officer's license.
According to Federal Deposit Insurance Corp. records, Ericson State Bank has seen its allowance for loan losses more than triple in the past year, while its amount of delinquent loans grew from zero to nearly $8 million.
In the news release announcing the sale of the bank, the Poulsens did not address the consent order, which was the bank's second in the past decade.
"We are so grateful to our staff and customers for their dedication over the years," Jack Poulsen said in the release. "We were looking for the best cultural fit and believe that we have found that here."
The merger and sale, terms of which were not disclosed, are expected to take 90-120 days to complete, according to the news release.
According to their most recent financial reports, Tri Valley Bank has about $47.4 million in assets, Eagle State Bank has about $43.4 million and Ericson State Bank has around $109 million.
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