State Bank - Detroit, MI

Bank Information

Episode Type: Suspension → Closure
Bank Type: state
Start Date: May 6, 1932
Location: Detroit, Michigan (42.331, -83.046)

Metadata

Model: gpt-5-mini
Short Digest: 52ec134c

Response Measures

None

Description

The examiner's report (dates May 1932 and referenced Sept. 1931) identifies the State Bank (Michigan) as having very large classified losses, defalcations and doubtful assets and is listed among Banks taken over. The article describes takeover/placement in doubtful condition rather than a depositor run. No description of a depositor run or temporary suspension/reopening is present; therefore classified as suspension_closure (suspension followed by closure/receivership).

Events (2)

1. May 6, 1932 Suspension

Cause: Bank Specific Adverse Info
Cause Details: Examiner reports large classified losses, doubtful real-estate and commercial loans, employee defalcations and severe depreciation in bond account leading to takeover; bank placed among banks taken over and assets doubtful (May 1932 report).
Newspaper Excerpt: This Includes the State Bank Mich. Upon the schednoted that $10,000,000 these banks the and believed will be considerable the manner their being was business for them bank over large losses
Source: newspapers

2. * Other

Newspaper Excerpt: From the above paragraphs determine that the offithis bank not the proper type. ... BANKS TAKEN OVER. This Includes the State Bank Mich. Upon the schednoted that $10,000,000 these banks ... believed will be considerable ... manner their being was business for them bank over large losses but subject bank liable many leases which will run into serious amount. The liability these leases shown schedules of the American State Bank. The these banks has been placed in the doubtful this time.
Source: newspapers

Newspaper Articles (1)

1. February 2, 1934 Detroit Free Press Detroit, MI

Article from Detroit Free Press, February 2, 1934

Click image to open full size in new tab

Article Text

Text of Leyburn Reports on First National Status the Free Press Bureau) report 1931, and countersigned Leyburn, chief National examiner the district which includes committee counsel in the Senate banking investigation today. completed Sept. 25, 1931, by who an offiGroup. That part the report today follows: No. of bank, 1057, date of report General remarks (continued). With the this necessary for the past several years been Mr. Dwight failed hold the loaning line with prudent policies, result officer carried his particular department just about he and most the vices About Mr. Herbert tenden ceed Douglas, and hoped he institute new policies designed to correct this situation management failed bringing about the Merger Decided Upon In the sired this officials the Detroit Bankers Company, decided take the steps merge First National Bank the Wayne Bank under the Bank Mark president the Detroit for with the Mr. burn, chief National bank and Ballantyne Mr. Mark Wilson, the attorneys Detroit At this department asset examination of the Peoples County Detroit. The result this ination forth report should given this report the merits merger. Through this merger it is proposed made the Ballantyne qualified handle position, because sterling large ing acknowledged conservative policies. posed that strong be placed out Ballanprobabilities this will be Mr. Mark Wilson. Wilson exceptional choice for his experience and character Numerous changes place from which will tended office from further Other Noted Other from this noted the report examination Peoples County Bank. All classified in this port will be eliminated prior to merger. REDFORD BANKS. Kindly note remarks in connecmatter page this This assets without the consent the comptroller the currency subsevere assets banks nonconforming value applied bank not this because that other method should found these assets the bank. If your are this deal, letter should Other matters of criticism are listed the report are believed to SECOND PART OF LEYBURN REPORT What person or persons, If any opinion the of the bank to what Detroit Bankers Company tempted credit policies towards but without control owned by individual affiliated particuto and the amount of stock held the shares owned the Detroit Company. directors men of judgment and familiar dependupon active (or direcand leave the management to familiar and independ. ent in judgment. Do regard the management not, reasons. weak Do you the bank absolutely both collectible pay and creditors in its ability the usual demands in the ordinary bank is in weakened or condition, did as sources of shareholding other confer about obtaining such aid? Bankers Company. Was meeting the board directors all matters subject criticism considered them? names directors and officers whom you discussed conditions. with executive commitDid you as the directors papers, if any, has the bank authorized under section of the Federal serve Act? any submit report on form (Include here criticisms and examiner to state the report proper.) report reflects very satisfactory condition showing classified losses and doubtful aggregating profit the taking the of slow assets. has been brought about two major causes, namely: General business and the Detroit suffered along with other large cities from depression particularly the the motor indusfloating tent on for its income. When source come reduced other branches extent affected. This condithe value of real estate. Real estate values of two years on this basis. buildings shown Foreclosures and numerous. Detroit House has from the real received six hoping by this increase values. R. Hopkins, Examiner. By Alfred Leyburn, Chief Examiner Report May 1932 The are from Alfred tional the National Bank, Detroit, 1932 bank 10527, date of report 5/6/32. General remarks, (continued.) COMMERCIAL LOANS. The straight lines of credit plus frankly bad dition. such loans Peoples Wayne County Bank perhaps more than loans of the First National Bank. This probably due first, loanthe Peoples Wayne County much weaker, and second, the partment Michigan permitted larger percentage which strictly speaking, not been lowed commercial bank. loans some first mortgages and great many mortgages. Such mortgages these were the Wayne County are listed estate loan schedule. examiner strongly that superhuman bring loans and put them proper Certainly seems almost for them the present type of loaning officers. EMPLOYEES LOANS. separate schedule contained report showing the officers $4,000 and that begin$2,000 these items At the close amination the much Bankers the loss will Most for the in the Company state affairs caused the the and ous from defalcation standpoint believed should employees of all these obligations. DETROIT BANKERS COMPANY This company, consisting other banks throughout Mich the opinion amount of the present stock this backed practisub dropped in $20 close referring to large will the 256,000 shares Detroit Bankers Company collateral commercial loans dangerous act the directors take and speak safety bank $4,000 this company, which collectible present time. fact reality loss to the bank on the present basis. REAL ESTATE LOANS The real estate loan schedule highly estate loans which frozen condithis true because the rapidity with which Detroit due automobile industries. These estate loans going defaulted by the hunthe separate $8,000,000 speaking, there great the estate loan practically to properly analyze them there 60,000 mortalone. From these amount of other bank $8,000,000 potential other two three times that amount, possibly more conditions not change. amount shown doubtful is unquestionably loss. BANKS TAKEN OVER This Includes the State Bank Mich. Upon the schednoted that $10,000,000 these banks the and believed will be considerable the manner their being was business for them bank over large losses but subject bank liable many leases which will run into serious amount. The liability these leases shown schedules of the American State Bank. The these banks has been placed in the doubtful this time. BOND ACCOUNT While the account contains sizeable depreciation believed many of the will come and the least their troubles. BRANCHES bank has 178 The branches City of which and should fear minds depositors, they could through branches make short work their SURETY BONDS ridiculously amount, now half millions, held Certainly with the plorable the employees, loans, the bank should on this amount considerable amount apprehension. LIQUIDITY will noted the liquidity entirely small this especially when taking its condition. DIVIDENDS The first quarter, dividends were paid basis cent entirely while the examiner feels should be eliminated entirely, the effect of doing would probably cause them much trouble. To eliminate altogether would mean the Bankers Company turn dividends perhaps cause suggested that they be allowed per annually FOR THE PRESENT DEFALCATIONS Examiner sending in many ports United covering shortages existing in the bank. He forwarding covering number of ficers, which has certain perhaps extremely unwarranted their part. They seem volved great many estate transactions which on the face appears they are making companies friends for may may not true, but due the bank, the examiner feel advisstart into the mattoo deeply fear of results among the employees officers highly nervous mental be surthis the the fact that weak unqualified From the above paragraphs determine that the offithis bank not the proper type. With the exception two they are very nothing but in like do not mean This due the that they should fire about their ploy dozen good men would some of and efficiency. In past the bank has been governed Detroit Bankers which John Mark Wilson dent. About week this two that the of the the bank Mr. board, up until and half was mittee policy be out along the doing thing strength. GENERAL This bank has four large offices approximately 178 throughAll these banks and branches entered at starting examination the men start same consisted of 460 assistFederal exception were balance of the men the auditing partment the the bank itself job almost size and certainly very the bottom due to the manner which the business the deplorable the management and assets. For the department's sideration state the losses in the more shown in recapitulation The fact the bank the examiner's opinion contains 000,000 in and $49,000,000 losses This amount cannot shown the lutely no way losses and such an would be completely Just how the tion will ever work out such burden cannot foretold. The believed will decrease. For the did call "doubtful are cured be sidered but fairness to them and of the aggregate other such loans were only classified At close examination meeting Chief aminer the committee all outlined freely discussed. concluded out than approximately $8,500,000 losses balance being shown doubtful. As rapidly possible the weak officers (End May 1932, report.)