Former TierOne Bank Location in Auburn Now Operating as Part of Great Western Bank of Sioux Falls
On Friday, June 4, TierOne Corp. of Lincoln became the largest bank failure in Nebraska history. The outcome was the result of hundreds of millions of dollars in bad loans on out-of-state real estate development.
Great Western Bank of Sioux Falls, S.D., bought TierOne’s 69 branch offices — 59 in Nebraska (including Auburn), nine in Iowa and one in Kansas — and assumed all $2.2 billion of its deposits.
It then re-opened the offices on Saturday, June 5 as Great Western locations. Great Western Bank’s parent company is the National Australia Bank, although its history traces back to the former Douglas County Bank of Omaha.
The Federal Deposit Insurance Corp. took control of TierOne at the request of its federal regulator, the U.S. Office of Thrift Supervision, which had placed the Lincoln bank under tight supervision in January of last year because of bad loans in Florida, Nevada, Arizona, California and some other states.
The closure was expected to cost the FDIC’s deposit insurance fund an estimated $297.8 million. That money comes from premiums paid by federally-insured financial institutions.
While no official announcements have been made regarding the future pertaining to specific communities where both a TierOne and Great Western Bank existed, there was in fact very little overlap with both having offices in only Omaha and O’Neill, Nebraska, and Red Oak, Iowa.
Ironically, Great Western had agreed last year to acquire 32 of TierOne’s offices, but federal authorities rejected that plan. Now, Great Western Bank is ending up with 69 offices.
What Customers Need to Know After TierOne:
The FDIC will continue insuring deposits under Great Western for up to $250,000.
TierOne customers should use their existing branches until they receive notice from Great Western.
TierOne ATM locations will operate normally. TierOne customers can continue writing checks on their TierOne accounts until they receive notice that their accounts have been switched over to Great Western.
For online banking, TierOne customers should go to the TierOne website, which will direct them to the Great Western site, where their exising account numbers and passwords will work.
Interest on all deposits accrued through June 4 will be paid at the same rate. Great Western will review rates and then notify customers if the interest rate is to change.
All loans and mortgages have been assumed by Great Western Bank with the payment amount and due dates staying the same.
If you had a loan in process, you should contact your loan officer.
All shares of TierOne Bank were owned by its holding company, TierOne Corporation, Lincoln, NE. The holding company wasn’t included in the closing of the bank or the resulting receivership. If you are a shareholder, you should contact the TierOne Corporation directly.