Savings Bank - Nanticoke, MD

Bank Information

Episode Type: Suspension → Closure
Bank Type: savings bank
Start Date: October 4, 1940
Location: Nanticoke, Maryland (38.272, -75.905)

Metadata

Model: gpt-5-mini
Short Digest: 303faa25

Response Measures

None

Description

The Savings Bank of Nanticoke closed permanently (failed) on October 4, 1940 after a shortage uncovered; closure attributed to embezzlement. The bank was placed in receivership, distributions to creditors occurred (June 20, 1941), and subsequent court rulings concerning FDIC claims occurred in 1942. No run is mentioned in the articles.

Events (3)

1. October 4, 1940 Suspension

Cause: Bank Specific Adverse Info
Cause Details: Bank closed after a shortage in its accounts was uncovered; later reports state failure in 1940 was through embezzlement
Newspaper Excerpt: the defunct Savings Bank of Nanticoke, which closed last October 4 after a shortage in its accounts had been uncovered
Source: newspapers

2. June 20, 1941 Receivership

Newspaper Excerpt: Creditors of the defunct Savings Bank of Nanticoke ... have been paid in full. Bank Commissioner John W. Downing said that full and final payment of the principal claims of all creditors had been made under the receiver's second distribution account, ratified by the Wicomico County Circuit Court.
Source: newspapers

3. July 7, 1942 Other

Newspaper Excerpt: A Maryland chancery court judge ruled that payment of interest at 6 per cent must be made to the Federal Deposit Insurance Co. for sums advanced to depositors of a defunct savings bank ... the closed savings bank of Nanticoke which failed in 1940 through embezzlement
Source: newspapers

Newspaper Articles (2)

1. June 20, 1941 Evening Star Washington, DC

Article from Evening Star, June 20, 1941

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Article Text

Bank Creditors Paid In Full at Nanticoke B5 the Associated Press. SALISBURY, Md.. June 20.Creditors of the defunct Savings Bank of Nanticoke, which closed last October 4 after a shortage in its accounts had been uncovered, have been paid in full. Bank Commissioner John W. Downing said that "full and final payment of the principal claims of all creditors" had been made under the receiver's second distribution account, ratified by the Wicomico County Circuit Court. The distribution amounted to 25 per cent, or $37,196.12.

2. July 7, 1942 Evening Star Washington, DC

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Article Text

FDIC Interest Claim Upheld at Salisbury By the Associated Press. SALISBURY, Md., July 7. - A Maryland chancery court judge ruled that payment of interest at 6 per cent must be made to the Federal Deposit Insurance Co. for sums advanced to depositors of a defunct savings bank before debenture holders may collect payment on principal. Judge T. Sangston Insley, in the case of the closed savings bank of Nanticoke which failed in 1940 through embezzlement, cited Maryland law relating to debentures as holding such indebtedness should be considered part of the bank's capital structure and, as such, subordinated to the rights of depositors and creditors. Attorneys for the Maryland bank commissioner, receiver for the bank. had contended the FDIC had been paid insurance premiums for service rendered to depositors and was not entitled to interest to the exclusion of debenture holders.