Sanford National Bank

Bank Information

Episode Type: Suspension → Closure
Bank Type: national
Bank ID: 5050
Charter Number: 5050
Start Date: April 30, 1931
Location: Sanford, Maine (43.439, -70.774)

Metadata

Model: gpt-5-mini
Short Digest: 7501f3f4

Response Measures

None

Description

Article (April 30, 1931) describes large losses at Sanford National from defaulted municipal bonds and an arrangement in which Fidelity Trust Company agreed to take over the Sanford institution to protect depositors. The text does not explicitly describe a depositor run, but indicates the bank was in critical condition and was to be taken over — consistent with a suspension/closure and takeover. I corrected minor OCR errors in the excerpt (names and numbers) when interpreting the text.

Events (3)

1. July 20, 1896 Chartered

Source: historical_nic

2. April 30, 1931 Suspension

Cause: Bank Specific Adverse Info
Cause Details: Large losses from defaulted municipal bonds (many issued in Florida and other Southern states) forced the bank into a critical condition; Fidelity Trust agreed to take over the institution to assume liabilities and protect depositors.
Newspaper Excerpt: Fidelity then agreed to make the purchase ... saved the shareholders of the Sanford National bank from an assessment ... and probably the depositors from embarrassment and some loss.
Source: newspapers

3. September 5, 1931 Voluntary Liquidation

Source: historical_nic

Newspaper Articles (1)

1. April 30, 1931 Journal Tribune Biddeford, ME

Article from Journal Tribune, April 30, 1931

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Article Text

Bank Audit Awaited (Continued from Page One) suffered large additional losses. That the stockholders were not called for an assessment under the liability law, it was explained, was due to the efforts of William Batchelder, president of the Sanford Trust company, and largest stockholder in the Sanford National bank, who, with directors of the latter institution, raised $230,000 to cover part of the losses. If the audit confirms that made by the Fidelity Trust company. Mr. concluded, the stockholders are bound to lose every dollar they put into the institution but Sanford has been saved the necessity of having the bank close and the depositors have been protected. Leonard Pierce, representing the Fidelity Trust company. explained the purchase of the Sanford bank in substance as follows: The Portland bank was at first reluctant to assume the liabilities of the Sanford National. When arrangements to have the Sanford Trust company handle the situation failed, Fidelity agreed to take over the Sanford institution provided the double liability of the stockholders was assured. Mr. Batchelder declined to sanction this plan. He had raised 000 and the directors had obtained $60,000 more. Fidelity then agreed to make the purchase, being influenced by two motives: First, was the conviction that improvement of business in Sanford would make the enterprise profitable; second, to spare Maine the unfavorable publicity which would result from a bank failure. Mr. Pierce read letter from Bank Examiner Williams in which the Federal official expressed the opinion that contract between the two banks "relieved very critical situation and certainly saved the shareholders of the Sanford National bank from an assesment their stock in the bank and probably the depositors from embarrassment and some loss." The origin of the bank's difficulties, Mr. Hinckley related, was the default of certain municipal bonds, the larger part of which were issued by communities in Florida and other Southern states. National Bank Examiner F. D. Williams had accepted these securities their face value carried in the books of the Sanford National as late as last July and seven per cent dividend had been declared on that basis. The losses from these defaulted bonds, according Hiram Willard. attorney for the Sanford National bank, amounted to He asserted that the stockholders were not informed of conditions because of fear of the directors that a run on the bank might result. Hirim Willard, speaking for the directors of the bank, said the losses from the bonds amounted to but that the depreciation occurred the bank examinJuly and January audits. In July, Mr. Williams said, the examiner accepted the securities at their face value as they were carried on the bank's books. In January, however, he required them to be listed at the prices they then were bringing in the market. One stockholder inquired if the declaring of the dividend in January had been "an attempt to cover something up and give stockholders false sense of security." He was told by Attorney Willard that the dividend had been earned on the basis of the July audit. More than 70 of the 250 stockholders attended the meeting, John Tucker was elected chairman and Mrs. M. Elizabeth Berard, secretary. Another meeting will be held as soon the stockholders' audit is completed.