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FIRST NATIONAL BANK VOLUNTARILY CLOSES ITS DOORS MONDAY MORNING BY ORDER OF BOARD OF DIRECTORS Institution Is Placed Under Supervision of National Bank Examiner at Request of Its Officials.
First National Bank (Sidney, MT)
Episode Information
- Episode UID
900401486- Episode Type
- Run → Suspension → Closure
- Bank Type
- national
- Bank ID
-
90040national - Charter Number
- 9004
- Start Date
- October 1, 1923
- Location
- Sidney, Montana (47.717, -104.156)
Metadata
- Model
- gpt-5-mini (chosen from majority vote of a three-model LLM ensemble)
- Short Digest
d0af95f9f79d520b
Response Measures
Public signal of financial health, Capital injected, Partial suspension, Full suspension, Books examined
Receivership Details
- Depositor recovery rate
- 42.9%
- Date receivership started
- 1924-02-26
- Date receivership terminated
- 1932-06-15
- OCC cause of failure
- Economic conditions
- Share of assets assessed as good
- 59.3%
- Share of assets assessed as doubtful
- 4.1%
- Share of assets assessed as worthless
- 36.6%
Description
Known receivership followed the February 1924 voluntary closing; later receiver litigation and final dividends through 1932.
Events (5)
1.
January 25, 1908
Chartered
- Source
- historical_nic
2.
October 1, 1923
Run
- Cause
- Bank Specific Adverse Info
- Cause Details
- Sustained heavy and unusual withdrawals beginning October 1923 that depleted cash reserve; not attributed to a specific false rumor but to prolonged withdrawals.
- Measures
- Directors attempted to continue operations, solicited depositor confidence, and planned reorganization; depositors organized mass meetings to pledge funds.
- Newspaper Excerpt
- Starting about the first of October, 1923, depositors of the institution began a steady withdrawal of funds
- Source
- newspapers
3.
February 11, 1924
Suspension
- Cause
- Bank Specific Adverse Info
- Cause Details
- Directors voluntarily closed the bank after cash reserve was practically exhausted from prolonged withdrawals since October 1923; placed under supervision of national bank examiner.
- Newspaper Excerpt
- The First National Bank of this city did not open its doors for the transaction of business Monday morning, the board of directors issuing an order to that effect.
- Source
- newspapers
4.
February 26, 1924
Receivership
- Source
- historical_nic
5.
February 26, 1924
Receivership
- Newspaper Excerpt
- Receiver references and later articles discuss suits by the receiver and receiver actions (receiver of the First National Bank of Sidney).
- Source
- newspapers
Newspaper Articles (14)
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LIQUIDATION SLOW DEMANDS HEAVY Available Reserve Practically Exhausted Through Excessive and Unusual Demands Made by Depositors. The First National Bank of this city did not open its doors for the transaction of business Monday morning, the board of directors issuing an order to that effect. Starting about the first of October, 1923, depositors of the institution began a steady withdrawal of funds and this continued up until the order to close its doors was given. Over $165,000 has been withdrawn since October 1, and since conditions in this section prevented a prompt liquidation, collections could not be made readily enough to meet the demands made by depositors. During this time, between October 1 and last Monday the excessive and unusual withdrawals of deposits from the First National practically depleted the cash reserve. The directors of the First National bank held a meeting Sunday morning and decided that under the circumstances they would be compelled to temporarily close the institution in order to safeguard the best interests of all concerned. The First National Bank is the pioneer bank of Richland county, and has played a very important part in the development of the same. Demands for loans, made by men actively interested in the various commercial and agricultural developments of the county have always been taken care of by this bank and in this manner it has been responsible to a very large extent for the progressive upbuilding accomplishments during the last 20 years. In better financial condition than at any time during the past three years, and it is the belief of the officers and directors of the institution that depositors will suffer no loss through the temporary suspension of business. While a great many of the heavy depositors of the First National knew that the long drawn out run on the bank was taking place they steadfastly refused to follow the lead of the multitude of smaller depositors, and it is to these loyal patrons that the officials of the bank have expressed their profound thanks for their unwavering confidence. The stockholders and directors deserve great credit for having the courage to keep the bank open in the face of a run lasting over such a long period of time and which could mean only one thing, but they held on in the hope that government aid would reach them in time to forestall ultimate suspension of business. The directors of the bank entertain the hope that an early reopening of the institution may be accomplished. Certain conditions of finance prevailing will permit the bank to resume business at an early date after its reorganization, plans for which are already under way. Many messages and personal expressions of sympathy have been tendered the officers of the bank, and full confidence has been shown by many of the depositors indicating a willingness to sign up to the limit that the institution may more quickly resume its normal activities. With the reorganization of the First National it is expected that those depositors who have their money temporarily tied up will receive dollar for dollar on every deposit in the keeping of the institution.
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MASS MEETING TO BE HELD IN SIDNEY BY DEPOSITORS AND FRIENDS OF FIRST NATIONAL BANK SATURDAY FEB. 16 On Saturday afternoon, February 16, (tomorrow) there will be held at the Armory in Sidney a mass meeting of the depositors and friends of the First National Bank. As related in the principal story in this paper the closing of the bank was caused by the depletion of the cash reserve. This can be remedied and the bank reopened in a very short time if the depositors will reinstate the bank in their confidence and do business in the same old way. The capital of the bank is in excellent condition. The collateral securing loans is all in good shape, the surplus is practically intact, with the bank in better condition now than at any time during the past year with the exception of the reserve, which has been, as stated above, depleted through the heavy withdrawals of deposits. Now is the time when Richland county needs men—real men, who have the courage to stand by their community and see it through to prosperity. This can be done if everyone will put their shoulders to the wheel and push this enterprise back onto the highway of successful operation. Every man, woman and child in this county will be materially benefited by attendance at the meeting, and the friends of the institution, and those who have faith in Richland county especially, are urged to be present Saturday afternoon at 2:00 o'clock at the Armory.
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FIRST NATIONAL BANK MAY BE RE-OPENED SOON A mass meeting of the depositors and friends of the First National Bank was held at the Armory in Sidney last Saturday afternoon for the purpose of discussing ways and means of assisting the board of directors of the bank in having it re-opened at an early date. H. E. Meisenbach was elected chairman and D. H. Narum secretary of a permanent depositors organization. The committee of five that had been appointed at a previous informal meeting were on motion elected to continue to act as an executive committee for the organization. The following men constitute that committee: W. H. Stewart, chairman; H. L. Rounce, F. W. Amsden, M. L. Hoffstot, and R. O. Rea. This committee had worked out some of the details of a reorganization plan and requested Mr. C. E. Collett to explain their plan to those present. Mr. Collett was therefore called upon and outlined the situation briefly as follows: That there were four things to consider; the first being that before the bank could be safely reopened, all persons now having money in the closed bank, would have to sign agreements to leave present deposits in the bank for a stipulated period and evidenced by certificates of deposit bearing the date of reopening and drawing interest from that date. The second point made was that the stockholders of the bank were still ready and willing to do their utmost to assist depositors and that they had given assurance that they would attempt to raise $50,000.00 to be added to the assets of the bank. The third important consideration mentioned by Mr. Collett was that it would be necessary to raise $50,000.00 additional and this amount to be raised and placed in the reopened bank by present depositors on time certificate bearing the date of re-opening and also bearing interest. The fourth point covered the matter of carrying on the general business of the bank as before, including checking accounts, etc., in a normal manner. Mr. W. K. Adams, Vice President of the bank, was asked by the chairman to tell the depositors something of the condition of the bank at the time of closing and Mr. Adams presented the following figures which were taken from the books of the bank. Mr. Adams stated that on November 8th, 1923, the bank had bills receivable amounting to approximately $795,023.00 and at the time of closing this amount had been reduced by $104,654.00, which had been collected from borrowers. That on November 8th the cash reserve of the bank amounted to $63,993.00 but that this reserve had been reduced to $6,639.00 on the date of closing. Deposits withdrawn between November 8th and February 9th amounted to $154,380.00. During the period above named, the bank had liquidated $15,000.00 of borrowed money which brings the gross amount paid out during that time to $169,380.00. Mr. Adams further stated that during the months named, in normal times deposits usually increase rather than decrease. Mr. J. A. Loken of the Sidney National Bank, was present and in a short talk said that he considered the plan sound, as presented, and expressed his willingness to do everything possible to assist. Short talks were also made by Mr. J. P. Meadors, R. S. Nutt, Dave Stewart, Mr. Frandsen, Rev. Aiton, C. C. Narum, C. E. Wyman, M. L. Hoffstot, R. P. Blair, Mrs. I. J. Peterson and Mrs. Mae Ball. Rev. Powell of Billings, mentioned the case at Billings where a bank was closed about 12 years ago and is still in the hands of a receiver. Mr. Powell asked those present to take the advice of a non-resident and avoid a permanent receivership if possible to do so. The meeting then unanimously voted to adopt the plan presented by Mr. Collett and to do everything possible to conserve the interests of the depositors by having the bank re-opened. It is considered that this plan is absolutely safe because all deposits now in the bank will remain on deposit for from one to five years, at the option of the directors of the bank and special deposits made under the pledges now being taken will also remain intact for the period of one year. Each depositor is assured that no other depositor can withdraw funds now in the bank and with the addition of $100,000.00 of new money, the possibility of a run on the bank that could cause harm, is eliminated. Teams of men are now in the field obtaining signatures and pledges of new deposits. A number have already made deposits with the representative of the banking department in charge of the bank and a large number of other pledges are in the hands of the committee. Offers of financial aid are pouring in from all sources and the men in charge of the work express appreciation of the fine spirit of co-operation shown thus far. The matter of securing signatures in the neighborhood of 1700 accounts means a vast amount of work and all depositors who have not yet been called upon are urged to assist by calling at the Depositors Committee Office in the First National Bank Annex for the purpose of signing the agreement blanks.
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SUIT CAUSES SCARE IN RANKS OF BANKERS Fear Widespread Demand for Dismissal of Receivers Who Were Cashiers in Closed Banks, and Appointment of New Ones Will Uncover Much Criminal Irregularities. Consternation was thrown in the ranks of bankers thruout the state this week by the institution of an action, by the receiver of the First National Bank of Sidney, against the directors of that defunct institution for $39,000. The matter is thrown into the Federal Court and it is feared by bankers that if the suit is successful it will be followed by many more of a like nature and possibly by criminal proceedings.
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COVERED UP THEIR CRIMINALITY This suit has caused much agitation amongst the money changers because a widespread demand has sprung up throughout the state for the dismissal of Receivers who were in any way connected with banks before they closed and the substitution of men who would hold the scales of justice evenly between the depositors who lost money and those who got it. It is contended by those who ask for a change of Receivers that many of the present receivers were formerly cashiers of the banks they closed and that their position gives them a chance ta cover up and destroy evidences of their criminality. It is further contended that with the appointment of new men many of the bank wreckers now at large would be brought to justice and in that way a check would be put on further operation of this class of criminals within e the state. it SIDNEY BANK SUIT n The facts in the Sidney bank suit are briefly as follows: e W. E. Birmingham, receiver of the d First National Bank of Sidney, Friday filed an equity suit in the federal " court against dierctors and officers of rd the bank asking the court to deter mine their liability and enter judge g ment on loans totaling $39,000, which the receiver alleges were made con nt (Continued on Page Four) e,
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# SIDNEY BANKERS RUN # AFOUL OF J. S. LAW (Continued from page one) trary to the provisions of section 5200 of the revised statutes of the United States. SEN. ADAMS AMONG DEFENDANTS In allowing these loans, the complaint charges, the defendant permitted a violation of the rule which prohibits any one person or concern from borrowing more than 10 per cent of a national bank's capital and surplus. The defendants are W. K. Adams, S. F. Donaldson, Ira M. Alling, L. H. Turner, C. E. Varco, Axel Nelson, J. S. Day, J. S. Beagle and Lambert Keffeler, Day being president, Alling, Adams and Donaldson, vice presidents, and Turner cashier. The directors cited were elected "GROSSLY MISMANAGED" The directors cited were elected January 11, 1920, and with the exception of Keffeler, who retired January 9, 1924, served until the bank closed. It is alleged in the complaint that Nelson and Keffeler from 1922 to 1924 neglected their sworn duties in failing to attend many of the directors meetings during the time when, it is charged, the affairs of the bank were "grossly mismanaged," and, according to the complaint, the bank's business was carelessly conducted. It is alleged that the loans cited were made by the bank's agents and officers and approved by the directors. Loans listed are: To Andrew J. Mercer, $13,163.43. To H. G. Bentley, $11,000. To M. A. Wilson and L. H. Turner, conducting a stock farm business under the name of Wilson & Turner, $23,475 in three separate items. The complaint says there is due from Mercer $10,000, from Bentley $14,000, said to be the amount of the loan and interest, and from Wilson & Turner $15,000. UNPAID OBLIGATIONS $100,000 The First National bank of Sidney was capitalized at $50,000 and afterward created a surplus of $50,000. Birmingham cites that prior to his taking office as receiver, the comptroller of currency had levied against the stockholders, $20,000 being paid, but that it was impossible to realize another $20,000 because of the financial condition of some of the stockholders. The receiver says there will be $100,000 unpaid obligations when the bank's assets have been realized on.
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SIDNEY BANK CASE IN U. S. COURT * Great Falls, April 22. - The * final case set for this term of * federal court will get under way * this morning when evidence in a * suit by C. R. Clark, receiver of the First National bank of Sidney, against the directors of the * defunct bank is begun. * The suit, which was instituted by a former receiver. is based on the allegation that the directors permitted three loans to individuals and partnerships in excess of 10 per cent of the capital stock of the bank, in violation of the law. The principal item is one of $24, 500 which was loaned to a partnership and to the individual members of the partnership. The directors contend that it was their understanding that the partners had incorporated and will offer testimony to the effect that the articles of incorporation had been drawn and signed but had not yet been placed on record when the final loan was made. They will also endeavor to show that there was no doubt as the advisability of the loans because the principal sum of $24,500 has been reduced to less than * t $7,000 in less than two years. h Another loan in excess of the legal amount is charged where a S brother of a man who was indebted to the legal limit obtained a a loan and assigned the money to S his brother. The third case is where a note was issued for interest on another note which was equal to the amount allowed by S law. The directors of the defunct bank, who are defended by the firm of Cooper, Stephenson & e Hoover, will contend that there 2 was no intent to violate the law, e that no evidence of mismanageiment can be found and that the violations charged are based on e technicalities. * * * of * * * *
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BANK RECEIVER WINS JUDGMENT LOAN LOSSES Judge Charles N. Pray in the federal district court handed down a decree this afternoon in the case of C. R. Clark. receiver of the First National bank of Sidney against W. K. Adams, S. F. Donald-, son. Ira M. Alling L. H. Turner. C. E. Varce. Axel Nelson. J. S. Day, J. S. Beagle and Lambert Keffeler. The defendants are the directors of the bank and the receiver sought recovery for the losses sustained by the bank at Sidney through the making of excess loans to M. A. Wilson. L. H. Turner, H. G. Bentley and Andrew Mercer The court found for the plaintiff on the Turner and Wilson loan of $25,000 and holds the amount to be recovered by judgment to be $6.244.26 with interest bringing it up to approximately $11,000. The directors with the exception of Keffeler are held liable in an individual and personal capacity.
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SHERIFF'S SALE IN THE DISTRICT COURT OF THE SEVENTH JUDICI DISTRICT OF THE STATE OF MONTANA. IN AND FOR THE COUNTY OF RICHLAND Cora M. Porterfield. Plaintiff, versus Julia Booth, J. H. Clark. administrator of the estate of Samuel Booth, Deceased, Ole H. Rogue. Security State Bank of Fairview. Montana, a cor oration. First National Bank of Fairview, Montana, China R. Clarke, Re ceiver of the First National Bank of Sidney, Montana. a corporation. China R. Clarke. Receiver of the First National Bank of Sidney, Montana, and Mary Booth Defendants. To be sold at Sheriff's Sale at the front door of the county courthouse in the city of Sidney, Richland County, State of Montana, on the 27th day of August. A. D. 1927. at the hour of two o'clock P. M., of said day, the following described property to-wit: The North Half of the Southeast Quarter (N/SE%) And the Northeast Quarter of the Southwest Quarter (NE%SW%) of Section TwentySix (26) in Township Twenty-five (25) North of Range Fifty-Eight (58) E. M. M. Richland County, Montana Dated at Sidney, Montana, this 29th day of July, A. D. 1927. Geo. T. O'Brien. Sheriff C. E. Collett. Attorney for Plaintiff. Sidney, Montana.
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HOW BANK RECEIVERS ACT IN RICHLAND COUNTY Lambert Editor Flays Recoivers and Judges Go Out He Take Drink Together Says After Winding Up Affairs of Closed Institutions. (From Richland County Leader) the First NationBank building been looted truck loads fixtures have been hauled Sidney to be used in the new This about all that can be removed unless the Receiver gets short on salary funds and tears up the floor and sells takes down the walls sells the brick, which quite likely happen given. The time First State Bank went in this same manner has been but name, now the First National under the control of the Federal is going down the same lane. Oh, yes, the stockholders in their hundred per cent assessment, the law says they must, and the banks each small dividend But where has the balance The law does not say that Receiver rape closed bank prolonging its final settlement, oh He can keep on drawing big salary just long as there anything left to draw one with and when the assets are he rubs his soft fat hands together and tell the Judge that he has done he can and that there nothing more to settle. The Honorable Judge pats him on the back and says, "well done good faithful lets drink. We know of bank Billings that closed more fifteen years ago and Receiver has kept going from that time until now without winding the business. This was one the largest banks in that city and has proven fine thing for this man owns nearly all of the bank and by the Banking Department one of their crack This fellow fat and sleek and puffs when he walks. And when the dies he will be stuck deep in Hell he won't even be able see light the fires. Any that community suffers bank failure would save themselves lot of worry and receive satisfaction they would blow the establishment into million pieces not submit placidly to ing some with on his index finger in and get with the horns, hide tallow. you think we are spreading little too thick, just ask the of closed banks, the depositors or ask the people of the community. They can tell it to
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GLENDIVE MEN TO LEAVE FOR BILLINGS FRIDAY Glendive. May to The Schaeffer H. Watson. H. N. M. Hughes are leaving Friday by auto for to attend the meeting group two of the Montana Bankers' association which will be held in Billings. on Saturday. June Mr. Dion. cashier Exchange State bank of Glendive. while Schaeffer. who of the association. also president the Glendive State bank. SIDNEY BOY SCOUTS IN ANNUAL Sidney, May to the troops consisting local boys of the local Boy Scout movement went their annual encampment here Wednesday. The camp located miles this city on section of land known Natural Corral result the activities certain civic bodies cabin has been constructed and will headquarters for this years encampment. Regular army maneuvers and detail will be the order of the week's encampment. Under the leadership of Mr. Dan Kind. scoutmaster the boys will be their own the entire time. Sunday. June has been designated visitor's day. R. CLARKE RESIGNS AS RICHLAND BANK RECEIVER Sidney. May the R. Clarke. years resident of Richland county and connected with Montana banking circles for the past 20 receiver national years, banks in this immediate locality. has sent his resignation to the Comptroller of Currency in Washeffective June after which he will connected in an official capacity with the Nationbank located in New York City City. Clarke was the For years Mr of the Federal Rerepresentative serve and War Finance systems this locality The past years he served received located has this The affairs of city. recently been the banks have closed. His receiver for the First National bank of Sidney has not yet been named.
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NOTICES LEGAL NOTICE TO CREDITORS Deceased. Estate NOTICE IS HEREBY GIVEN, the by estate the Administrator undersigned, Minnie Wells, deceased, the creditors against and persons exhibit the said four of this after the first months his the administrator notice, to the Richland Bank Building, Sidney, Montana in the County of the of Minnie Wells, 1930. Dated April 1-8-15-22). (Pub. IN THE DISTRICT COURT OF THE JUDICIAL DISTRICT OF OF THE COUNTY OF THE TENA SOLEM, Plaintiff versus CLARK, Administrator Deceased, the KEN- estate Kenoyer HERBERT (nee NADA CHARLOTTE EMMA KENOYER HER Emma Kenoyer) BERT Nada Charlotte Kenoyer mother of Kenoyer, Minors, MARY THE SIDNEY co-partners doing business under the firm name and Wilson Turner, ANDREW FOLEY ANDREW FOLEY, Receiver Montana, the First Bank Sidney National NATIONAL BANK THE FIRST Sidney PERSONS WHO MIGHT CLAIMING EN LIEN INTEREST THE PROPERTY DESCRIBED THEREOF COM. PLAINT OR OWNERSHIP VERSE TO UPON PLAINTIFF'S OR WHETHER TITLE CLAIM OR POSSIBLE BE PRES ENT OR CLAIM OF DOWER. INCHOATE OR Defendants SUMMONS FOR THE OF Estate TO H. Administrator the CLARK, EMMA KENKenoyer. Emma KenHERBERT (nee KENOYER KENOYER HER EMMA Kenoyer) as BERT Emma Charlotte Kenover mother RED Nada Kenoyer, MARY THE SID BANK NEY WILSON and business under the partners doing and Turner style WILSON ANDREW FOLEY DREW FOLEY, Bank First Receiver THE FIRST NA Montana, BANK Sidney TIONAL OTHER CLAIMING PERSONS CLAIM ANY WHO MIGHT
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Paying Final Dividend The fifth and final dividend was made available last week to the depositors and certificate ,holders of the First National Bank at Sidney. The receiver's office at Sidney will be closed April 3.