Newspaper article THE JOURNAL RECORD

Seiling's Community Bank Shut Down by Regulators

Newspaper article THE JOURNAL RECORD

Seiling's Community Bank Shut Down by Regulators

Article excerpt

Community Bank of Seiling was declared insolvent and closed Wednesday by Oklahoma State Banking Commissioner Robert Y. Empie, who cited the four-year-old bank's "ill-advised lending policies" as the reason.

However, the failed bank's customers will be served at 9 a.m. today by First National Bank of Seiling, which paid a $16,000 premium to the Federal Deposit Insurance Corp. to assume the bank's deposit liabilities, according to Steve Katsanos, a spokesman for the FDIC in Washington, D.C.

No depositor will suffer any loss, according to the Oklahoma Banking Department.

Community Bank's customers automatically will become customers of First National Bank of Seiling, the department reported. They will be able to continue using their checks and deposit slips.

Total assets of Community Bank at closing were $5.6 million, said Katsanos. First National Bank of Seiling assumed about $5.4 million in 840 depositor accounts. The assuming bank also will purchase some of the failed bank's loans and other assets for $3.4 million.

The FDIC will advance First National $1.9 million to facilitate the transaction. It will retain assets with a book value of $2.2 million.

Community Bank was the sixth Oklahoma bank to fail this year - making Oklahoma the state with the most bank failures so far in 1987, Katsanos said. A total of 22 banks have failed in the U.S., he said.

Shortly after Community Bank was closed, a member of Gov. Henry Bellmon's staff reported that the governor's plan to help slow down the number of bank failures in Oklahoma may include a public-private proposal for infusing capital into struggling banks.

Empie, when asked to comment on the number of Oklahoma bank failures this year, replied:

"I would say this is an embarrassment to the banking industry. …

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