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Friday, May 09, 2008

Bank Failure: ANB Financial Costs FDIC $214 million

by Calculated Risk on 5/09/2008 06:19:00 PM

Did someone say "bank failure" this morning?

From the FDIC: Bank Closing Information for ANB Financial, NA, Bentonville, AR

ANB Financial, National Association, Bentonville, Arkansas, was closed today by the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation (FDIC) was named receiver. To protect depositors, the FDIC's Board of Directors approved the assumption of the insured deposits of ANB Financial by Pulaski Bank and Trust Company, Little Rock, Arkansas.

The failed bank's nine offices will reopen Monday as branches of Pulaski Bank and Trust Company. Depositors of ANB Financial will automatically become depositors of the assuming bank.

As of January 31, 2008, ANB Financial had approximately $2.1 billion in assets and $1.8 billion in total deposits. Pulaski Bank and Trust Company will assume $212.9 million of the failed bank's insured non-brokered deposits for a premium of 1.011% and will purchase $235.9 million of assets.

At the time of closing, ANB Financial had approximately $39.2 million in 647 deposit accounts that exceeded the federal deposit insurance limit. These customers will have immediate access to their insured deposits, and they will become creditors of the receivership for the amount of their uninsured funds.

ANB Financial also had approximately $1.6 billion in brokered deposits that are not part of today's transaction. The FDIC will pay the brokers directly for the amount of their insured funds.

Over the weekend, all deposit customers can access their insured money by writing checks, or by using their debit or ATM cards. Checks drawn on the bank that did not clear before today will be honored up to the insured limit.
In addition to assuming the failed bank's insured deposits, Pulaski Bank and Trust Company will purchase approximately $235.9 million of the failed bank's assets. The assets are comprised mainly of cash, cash equivalents and securities. The FDIC will retain the remaining assets for later disposition.

The transaction is the least costly resolution option, and the FDIC estimates that the cost to its Deposit Insurance Fund is approximately $214 million.