Newspaper article THE JOURNAL RECORD

Regulators Close Two Southeast Oklahoma Banks

Newspaper article THE JOURNAL RECORD

Regulators Close Two Southeast Oklahoma Banks

Article excerpt

Two Southeastern Oklahoma banks under common ownership, United Services Bank in Hartshorne, Okla., and Citizens Bank of Krebs, Okla., were closed at 3 p.m. Thursday by the Oklahoma Banking Department.

Deposits of both banks were transferred to First National Bank & Trust Co. of McAlester.

The banks exhausted capital as a result of loan losses attributed to poor lending practices, including out of territory lending, weak documentation analysis prior to funding, overlending and/or imprudent concentrations, according to Wayne Osborn, Oklahoma Bank Commissioner.

The Federal Deposit Insurance Corp. arranged an insured deposit transfer because of an inability to evaluate the quality of the bank's loan portfolio. All insured deposit accounts will continue to be insured by the FDIC.

Owners of the banks included E.W. Giles and Allen Greer, both of Oklahoma City, and F.G. Armstrong, of Fairfax, Okla.

The Hartshorne bank had deposits of $13.5 million in 2,100 accounts, including $33,000 in 23 accounts over the FDIC insurance limit, according to Bill Olcheski, FDIC spokesperson.

The Krebs bank had $13.2 million in deposits in 1,300 accounts, including $28,000 in 32 accounts over the insurance limit.

For the Hartshorne bank, First National is paying the FDIC a premium of $101,234 and will purchase other assets of the failed bank for $7.7 million.

First National will pay a premium of $75,101 and purchase other assets for $9.1 million.

The closings were 28th and 29th in Oklahoma this year and the 143rd and 144th nationwide.

The Hartshorne branch of First National Bank of McAlester will open for business at the Hartshorne location at 9 a.m. today to accommodate business as usual, Osborn said.

Depositors of the failed Krebs bank will also have access to their funds at the main office of the First National Bank in McAlester.

Deposits of the failed banks up to the statutory insurance limit of $100,000 will be available to their owners. …

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