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Troubled NBRS Financial Bank is closed by state regulators

Rising Sun-based NBRS Financial Bank has closed after takeover

State regulators closed NBRS Financial Bank late Friday and announced that Ellicott City-based Howard Bank assumed the independent community bank's deposits and purchased most of its loans and assets.

Gordon M. Cooley, Maryland's acting commissioner of financial regulation, took control of the Rising Sun-based and state-chartered bank at 6 p.m. and appointed the Federal Deposit Insurance Corp. as receiver.

NBRS Financial is the 15th FDIC-insured U.S. bank to fail this year and the second in Maryland, according to the FDIC. Slavie Federal Savings Bank, based in Bel Air, was closed May 30.

The FDIC estimated the closure of NRBS will cost the deposit insurance fund about $24.3 million.

NBRS, which serves about 12,000 customers in Cecil and Harford counties, had struggled from years of losses stemming from nonperforming assets, and regulators considered the bank undercapitalized. In April, federal bank regulators ordered NBRS to sell itself or combine with another bank, but it was unable to find additional capital or a buyer, Cooley said in the announcement.

"We work diligently with our federal counterparts to ensure that our banks operate safely and soundly, and to assist them in meeting challenges as they arise," Cooley said. "Despite this isolated instance, the state banking system remains safe and sound."

Founded in 1873 and chartered as a national bank in 1880 before converting to a state charter in 2002, NBRS has five branches, about $188 million in assets and total deposits of about $183 million. Branches are located in Rising Sun, Aberdeen, Elkton, Street and Peach Bottom, Pa.

The branches will reopen Saturday under the Howard Bank banner. All depositors will automatically become FDIC-insured depositors of Howard, a subsidiary of Howard Bancorp Inc., which had total assets of $534 million as of June 30.

NBRS customers should expect no disruptions and can write checks and use existing ATM and debit cards throughout the weekend, the state's announcement said.

Howard Bank, which has been expanding in Maryland and bought an NBRS branch in Havre de Grace in August, is the first Maryland-chartered bank to assume deposits and buy assets of a closed local bank from the FDIC, Cooley said.

Including the former NBRS branches, Howard Bank operates 13 branches, two regional offices and two mortgage centers in five Maryland counties and two states. It has branches in Annapolis, Timonium and Towson and mortgage operations throughout Central Maryland.

"We are very pleased to welcome NBRS customers and employees to Howard Bank," Mary Ann Scully, Howard Bank's president and CEO, said in a statement. "It's business as usual and customers can be confident that their deposits are safe, secure and readily accessible."

Scully said the bank has been pursuing a "consistent" growth strategy, through new branches and branch acquisitions.

It paid a premium of 1.19 percent to assume the deposits of NRBS. Howard Bank plans to sell some of NBRS' nonperforming and other loans, totaling about $18.4 million, within 30 days.

NBRS customers can get information about the bank closure from the FDIC at or by calling 800-930-1848. Howard Bank's toll-free number for NBRS depositors and borrowers is 844-862-7061.

Baltimore Sun reporter Timothy B. Wheeler contributed to this article.

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