Saturday, January 26, 2008

First Bank Closure of 2008

by Bill McBride on 1/26/2008 09:06:00 AM

From the FDIC: FDIC Approves the Assumption of all the Deposits of Douglass National Bank, Kansas City, Missouri

The Board of Directors of the Federal Deposit Insurance Corporation (FDIC) today approved the assumption of all the deposits of Douglass National Bank, Kansas City, Missouri, by Liberty Bank and Trust Company, New Orleans, Louisiana.

Douglass National, with $58.5 million in total assets and $53.8 million in total deposits as of October 22, 2007, was closed today by the Office of the Comptroller of the Currency, and the FDIC was named receiver.

... the FDIC estimates that the cost to its Deposit Insurance Fund is approximately $5.6 million. Douglass National is the first FDIC-insured bank to fail this year, and the first in Missouri since Superior National Bank, Kansas City, was closed on April 14, 1994. Last year, three FDIC-insured institutions failed.
This is a small bank, and by itself this closing is inconsequential. However this might become a trend, with a number of small FDIC-insured banks going under because of bad loans. I suspect the over-under line for bank failures this year has to be much higher this year than in 2007.

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