Regulators Close the Doors on Oklahoma and Wisconsin Lenders

The first full week of March saw no bank shut-downs, but that lull came to a quick end as regulators seized control of two community-based lenders Friday evening â€" one in Oklahoma and one in Wisconsin. They bring the number of names on the ""FDIC's failed bank list"":http://www.fdic.gov/bank/individual/failed/banklist.html to 25 for the 2011 calendar year.

[IMAGE] The ""Office of the Comptroller of the Currency"":http://www.occ.gov closed the ""First National Bank of Davis"":http://www.fnbdavis.com/ in Davis, Oklahoma after ""finding that the bank had experienced substantial dissipation of assets and earnings due to unsafe and unsound practices."" The OCC said it found the bank incurred loan losses that depleted its capital and ""there is no reasonable prospect that the bank will become adequately capitalized without federal assistance.""

According to a local television station, ""First 12 News KXII"":http://www.kxii.com/home/headlines/Community_reacts_to_popular_Davis_bank_presidents_firing_117617858.html, the bank's president was fired by the board of directors earlier in the week following a routine audit by the bank's regulatory agency.

[COLUMN_BREAK]

The First National Bank of Davis operated a single branch office with $68.3 million in total deposits and $90.2 million in loan assets. The FDIC brokered a deal with the ""Pauls Valley National Bank"":http://www.pvnational.com/ in Oklahoma to take over the failed institution.

Pauls Valley National Bank paid a premium of 7.5 percent to assume all of the deposits of the failed bank and agreed to purchase approximately $28.5 million of its assets. The FDIC will retain the remaining assets for later disposition. The Oklahoma bank's closing is expected to cost the FDIC $26.5 million.

Also on Friday, ""Legacy Bank"":https://www.legacybancorp.com/ in Milwaukee, Wisconsin, which opened 12 years ago, was shut down by the ""Wisconsin Department of Financial Institutions"":http://www.wdfi.org/.

According to the ""_Milwaukee Journal Sentinel_"":http://www.jsonline.com/business/117833403.html, the minority-owned bank met with early success and grew rapidly, but couldn't survive the persistent economic downturn that left customers unable to pay back their loans.

Legacy Bank had just a single local branch, $183.3 million in deposits, and $190.4 million in total assets. ""Seaway Bank and Trust Company"":http://www.seawaybank.us of Chicago agreed to take over the failed institution's operations.

In addition to assuming all of the deposits of Legacy Bank, Seaway Bank and Trust agreed to purchase approximately $165.9 million of its assets. The FDIC will hold on to the remaining assets for later disposition. The FDIC and Seaway Bank entered into a loss-share transaction on $120.0 million of the acquired assets. Legacy Bank's closing is estimated to cost the FDIC $43.5 million.