Busy but smooth day for new Community Bank of Oregon

By Alex Gary

BusinessRockford.com

The three teller booths were all occupied and nearly a dozen people waited patiently for the next teller shortly after the former Rock River Bank opened this morning at South Fourth and Washington as Community Bank of Oregon.

Thursday night, state and federal regulators shut down Rock River Bank and turned the four branches, three in Oregon and one in Rockford, and much of its assets over to Harvard State Bank, which was one of three banks to bid on the struggling bank’s operations.

Although traffic was heavier than usual this morning, it wasn’t a bank run or a panic. Mostly, longtime customers conducted normal business or checked in on what might change.

“I came down to make a deposit and talk to my banker,” said Arnold Noon of Oregon, a Rock River Bank customer for 20 years. “I’m a trucker and a farmer, and I do a lot of borrowing. They told me nothing is going to change with my business.”

Betty Brunner of Oregon also stopped by to make a deposit. She had been reading about Rock River’s troubles and was not surprised that the bank was shut down.

But she has no plans to change banks, she said. There are three other banks operating in Oregon.

“I trust the employees here. They are all staying,” Brunner said. “They have a lot of good people working there.”

The key new employee is Harvard State Bank President Roger Lehmann, who spent most of the long holiday weekend in Oregon and returned this morning to greet customers.

“We found out (June 30) that we were the winning bidders, so we had two days to prepare, and then we were here all weekend,” Lehmann said. The walls of his new office were mostly bare, other than a painting of the statue of the Eternal Indian, and the floor was crowded with boxes and boxes of files that Federal Deposit Insurance Corp. officials had yet to cart away.

Lehmann said he wasn’t sure how many customers he might lose because of the changeover. Rock River Bank had $77 million in assets when it was shut down. He didn’t believe it would be many.

“We’re working to make it as smooth a transition as possible.”

Carl Berg has worked at Rock River Bank for 23 years and is now a senior loan officer. He was working Thursday when the fleet of sport utility vehicles pulled up, packed with regulators prepared to work through the weekend, and state and federal banking officials announcing Rock River Bank’s closure.

“It was not a shock. We’ve been working on the plan to bring in more capital since the start of the year, so we all knew it could happen,” Berg said. He said over the weekend the question most people had was whether their money was safe and he assured them it was.

“I did have a friend ask me if I was going to be OK and I told him I was going to be fine. I knew our jobs were safe. Really, I just want to convey how happy I am that Harvard State Bank stepped in with the resources and capital we need to keep going.”

Five other Illinois banks were closed by federal regulators Thursday, all of them — including Rock River — operated by the Campbell Group, which had operated nine Illinois banks and invested heavily in risky mortgage-backed securities.

Assistant Business Editor Alex Gary may be reached at agary@rrstar.com or at 815-987-1339.