After crisis, Winfield bank breathing easier

The times are a little easier for Bruce Schwyhart and the Winfield bank he leads, CornerBank.

The bank announced this week that its formal agreement with the Office of the Comptroller of the Currency has been terminated.

"They actually came down and gave us the good news," Schwyhart, president of the $240 million bank, said Wednesday.

No longer can someone call his bank "troubled," he said.

"That's the big one, right there," Schwyhart said.

The bank was one of the first in the area to enter into such an agreement with a bank regulator, before the financial crisis in the fall of 2008.

Schwyhart said the enforcement action by the OCC turned out to be positive for the bank.

"Because we were among the first, we took quick action" to reduce CornerBank's concentration in commercial real estate loans, Schwyhart said. He said the bank's concentration was within regulatory limits, but just barely.

He said the bank redistributed $40 million of its $60 million in commercial real estate loans. And much of that redistribution — basically, the bank did not renew many of its commercial real estate loans — happened within the first six to nine months of the bank entering into the formal agreement.

"The fortunate part is most of those were renewed year to year," Schwyhart said. "We told them they would have to find another lender.

"These were good customers and they didn't really have trouble going somewhere else" for their commercial real estate loans, he said.

The bank was fortunate because it was able to reduce its commercial real estate concentrations before credit markets froze during the crisis and regulatory scrutiny on such loans heightened even more.

"And that helped us out a lot," Schwyhart said.

The agreement took effect July 1, 2008, and was terminated May 18, according to the OCC's website, but was not made public until earlier this month.