A 104-year-old thrift in Chicago with no financial problems was abruptly shut down by federal regulators following the suicide of its chief executive.
According to a Crain’s Chicago report
, Washington Federal Bank for Savings, a $166 million-asset institution with two branches, was closed on Dec. 15 by the Office of the Comptroller of the Currency (OCC), which claimed it "acted after finding the bank had experienced substantial dissipation of assets due to unsafe or unsound practices, and that the bank's assets were less than its obligations to its creditors and others."
The closure came 12 days after John Gembara, the thrift’s Chairman, CEO and President, was found dead after hanging himself.
However, the thrift showed evidence that it was financially ailing.
As of Sept. 30, its filings with the Federal Deposit Insurance Corp. (FDIC) showed $1.7 million in net income year-to-date, an annualized return on equity of 10.7 percent and virtually no delinquent loans. In 2016, Washington Federal generated a respectable $2.3 million in net income.
The parent of Chicago-based Royal Savings Bank agreed to acquire the insured deposits and $23.7 million of the thrift’s assets from the FDIC, with the remainder staying with the regulator until it can either sell or collect them to reimburse uninsured depositors.