After a short-lived quiet period the weekend before, state and federal regulators stepped in on Friday to shut down the operations of one community-based lender in Kansas and two in Missouri. Together, the three closings are expected to cost the FDIC more than $500 million and bring the ""2010 failed-bank tally"":http://www.fdic.gov/bank/individual/failed/banklist.html to 132.[IMAGE]
In Olathe, Kansas, the Office of Thrift Supervision (OTS) shuttered ""Security Savings Bank, F.S.B."":https://www.securitysb.com/onlineserv/HB/Signon.cgi The federal agency said the 54-year-old financial institution ""was undercapitalized"" and had ""no reasonable prospect of becoming adequately capitalized.""
The FDIC accepted a bid from ""Simmons First National Bank"":http://www.simmonsfirst.com in Pine Bluff, Arkansas to take over the failed bank's nine branch offices throughout Kansas. Simmons did not pay the FDIC a premium for Security Savings' $397 million in deposits. Simmons also agreed to purchase all of the Kansas banks' $$508.4 million in assets, of which the FDIC agreed to share losses on $334.2 million.[COLUMN_BREAK]
Chesterfield, Missouri's ""WestBridge Bank and Trust Company"":http://www.westbridgebank.com/ was closed by the Missouri Division of Finance, which named the FDIC receiver. ""Midland States Bank"":http://www.midlandstatesbank.com out of Effingham, Illinois was the acquiring institution, picking up $72.5 million in total deposits, for with Midland did not pay a premium; $91.5 million in assets, with $72.6 million falling under a loss-share agreement with the FDIC; and WestBridge Bank's solitary branch location.
""The demise of this bank is the result of aggressive lending decisions made by prior management,"" said Richard J. Weaver, commissioner of Missouri's Division of Finance. ""Many of these loans were in commercial real estate and development projects, which proved unsuccessful and became uncollectible. Losses are more than the bank can support.""
The largest of this weekend's failures was ""Premier Bank"":https://www.premierbank.com/ in Jefferson City, Missouri. It had nine branch offices, with $1.03 billion in deposits, and assets of $1.18 billion. It too was shut down by the Missouri Division of Finance, which cited ""aggressive lending"" and a heavy concentration in ""uncollectible"" commercial real estate and development project loans.
The FDIC reached an agreement with ""Providence Bank"":http://www.myprovidencebank.com in Columbia, Missouri to assume all of the deposits of the failed institution, for no premium. Providence also agreed to purchase approximately $657.9 million of Premier Bank's assets, $408.7 million of which are covered under a loss-share arrangement with the FDIC. The federal agency says it will retain the balance of the assets for later disposition. Premier Bank's failure alone is expected to cost the FDIC $407 million.