I wrote a quick piece this morning about Rochester's Home Federal Saving Bank issuing a statement about this week's reports about it being placed under closer superivision by federal regulators.
The article is in today's print edition.
Here's the full text of Home Federal's statement which was sent out last evening just as IBM's Watson was trouncing of the human contestants on Jeopardy!:
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Rochester, Minn. – Feb. 16, 2011 – HMN Financial, Inc. (HMN or the Company) (Nasdaq: HMNF), the $881 million holding company for Home Federal Savings Bank (Home Federal or the Bank), today commented on the previously reported
supervisory agreements between HMN and Home Federal and the Office of Thrift Supervision (OTS).
HMN president Bradley Krehbiel remarked, “The current recession has severely impacted banks across the United States, and Home Federal is not immune. Our top priorities are the sound and ethical operation of Home Federal and providing excellent customer service in the communities that we serve. Home Federal has maintained capital levels above what is required to be ‘well-capitalized’, as defined by our regulators. We are FDIC-insured and have offered banking services to our customers for more than 75 years.
“Maintaining a sound and ethical organization includes operating in compliance with bank regulations,” said Krehbiel. “The OTS has offered guidance to banks across the country as we collectively recover from the recession. I am confident that we have taken steps to build a solid future for our Bank, and we expect our agreements with the OTS will further strengthen our foundation.
“Home Federal has a long-standing commitment to helping people in our communities obtain home ownership, and we understand how current market conditions have affected our customers,” said Krehbiel. “In addition, the decline in real estate values and single-family home sales has caused commercial loan customers to also experience significant stress. As a result, the loss in business income has made it difficult for some commercial borrowers to repay their loans. To address the increase in problem loans, we have hired additional staff whose key responsibility is to work with our commercial loan customers during this period. We also conducted ongoing reviews of Home Federal’s commercial loans, enabling us to identify problems early on – before they might become major losses for our borrowers and our Bank. Lastly, we implemented policies and procedures to strengthen how we analyze new loan requests.”
Krehbiel continued, “We have a positive working relationship with our regulators and continue to take all necessary steps to comply fully with their recommendations and requirements. As part of our supervisory agreement, we will submit a capital plan to the OTS by May 31, 2011. Additionally, the Bank will continue to serve its consumer and business customer base with the financial products and services they need, and our service will not be impacted in any way.”
About HMN
HMN Financial, Inc. and Home Federal Savings Bank are headquartered in Rochester, Minnesota. The Bank operates ten full service offices in southern Minnesota located in Albert Lea, Austin, Eagan, LaCrescent, Rochester, Spring Valley and Winona and two full service offices in Iowa located in Marshalltown and Toledo. Home Federal Private Banking operates branches in Edina and Rochester, Minnesota. Home Federal Savings Bank also operates a loan origination office in Sartell, Minnesota.
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