Planned bank derailed by FDIC

A Bend-based bank with roots in Sisters appears to have died before it had a chance to live.

Crown Point National Bank has all but thrown in the towel, based on denial from the Federal Deposit Insurance Corporation (FDIC) to offer deposit insurance to potential customers.

Andrew Gerlicher, president and CEO of the proposed bank, said the seed money for the bank is gone.

"We are at the end of our resources. I'm looking for a job," he said.

A news release from the proposed bank in August of 2008 said there were 43 founders who advanced $4 million to fund the bank's organization.

The money was used to pay such things as salaries for the management team, office improvements and leases, equipment, marketing studies and legal fees.

Crown Point's lease on a prime location at 950 Bond St. in Bend ended on June 30 and the sign came down last week.

Bend was to be the headquarters location, with another in Portland, at 1000 Broadway. A possible location in Sisters was also discussed.

About 30 employees would have been hired, with 22 in Bend, Gerlicher said.

The idea for the bank originated with Elijah Aldinger, a Sisters resident who moved here a few years ago from Southern California after selling a mortgage business.

Gerlicher, a banking veteran in Oregon, said the ruling by the FDIC is not final at this point. The initial notification of the denial was done by phone from the San Francisco Regional Office in May.

He said the regional office told him they would not be inclined to approve the application for FDIC guaranteed deposits "in these economic conditions."

The board of directors for the proposed bank voted to formerly pursue the application with the Washington D.C.-based agency even though regional office decisions are never overruled, Gerlicher noted.

"It's a long, long shot," he said, but the founders want to see the reasons for the FDIC denial. In the meantime, the management team is looking for other opportunities.

The decision is particularly cruel because Crown Point was approved just last April by the Office of the Comptroller of the Currency, a federal agency that charters, regulates and supervises all national banks.

However, the approval was given conditional to receiving a thumbs up from the FDIC.

The FDIC is an independent agency of the federal government that began in 1934 in response to the thousands of bank failures that occurred during the Depression.

Since its start, no depositor has lost a single cent of insured funds from a bank failure, according the FDIC Web site.

The FDIC is funded by the financial industry, not the federal government. The fund has an insurance fund of $17.3 billion, to insure more than $4 trillion of deposits in the U.S.

That liability may dictate FDIC's caution. The economic realities are evident, as 53 banks have been closed this year in the U.S., compared to 25 in 2008 and just three in 2007, as reported by the Associated Press.

The FDIC did not return calls about the status of the application.

Gerlicher said Crown Point's business plan relied heavily on the experience of the management team and its desire to be a commercial and industrial lender seeking long-term, customer-oriented relationships.

"We planned on building core relationships with small and mid-sized businesses," he said. "Many are starved for capital.

"I feel bad that the decision happened at the end of the seed money. If it had been earlier, we could have adjusted," he added.

The bank founders had hoped to open last winter.

Investors who put up capital funding for the bank will be fully refunded, Gerlicher said, as the money has been in an escrow account.