FDIC Releases Bid Summary for Failed Oklahoma Bank
A few weeks ago a small Oklahoma bank named the First National Bank of Lindsay failed and the Office of the Comptroller of the Currency appointed the Federal Deposit Insurance Corporation as receiver. The OCC said in a statement that it “acted after identifying false and deceptive bank records and other information suggesting fraud that revealed depletion of the bank’s capital.”
A notable feature of the FDIC’s resolution of the First National Bank of Lindsay is that uninsured depositors of the bank are expected to bear at least some losses. The FDIC’s press release explained that though First Bank & Trust Co. of Duncan, Oklahoma had agreed to assume all insured deposits of the failed bank, uninsured depositors, for now, would have access to only half of their uninsured funds.
In addition, based on the estimated recoveries of the failed bank assets, the FDIC will make 50 percent of uninsured funds available to those depositors on Monday, October 21, 2024. This amount could increase as the FDIC sells the assets of the failed bank.
As of June 30, 2024, The First National Bank of Lindsay reported total assets of $107.8 million and total deposits of $97.5 million. Approximately $7.1 million of the deposits exceeded FDIC insurance limits; this amount is likely to change once the FDIC obtains additional information from customers.
Today, the FDIC disclosed the list of bids it received for the failed bank. According to the agency, bids were received from five different banks, all relatively small and all located in Oklahoma:
Bank of Commerce, Duncan, Oklahoma
F&M Bank, Edmond, Oklahoma
First Bank & Trust Co., Duncan, Oklahoma
Gateway First Bank, Jenks, Oklahoma
Shamrock Bank, NA, Coalgate, Oklahoma
Notably, at least a few of the bids the FDIC received appear to have been for all deposits of the failed bank, rather than only the insured deposits.1
But as the FDIC explains, “[t]he winning bidder’s acquisition of the insured deposits was the least costly resolution compared to a liquidation alternative,” and therefore this bidder won the auction.
Under the FDIC’s bid disclosure policy, the names of the bidders are de-linked from their specific bid or bids.