Diving briefs:
- Santa Anna National Bank in Santa Anna, Texas, recently became the second bank to fail this year, according to reports from the Office of the Comptroller of the Currency.
- The Federal Deposit Insurance Corporation has announced that the Coleman County State Bank from Coleman, Texas, will be taking over all insured deposits and assets from the failed bank.
- The FDIC indicated that fraudulent activities were a major factor in the bank’s collapse, estimating a cost of approximately $23.7 million to the deposit insurance fund. These figures may change as the bank’s assets are liquidated.
Dive Insights:
Established in 1933, Santa Anna National Bank had deposits totaling $706.9 million and assets of $71.4 million as of mid-April. By June 18, these metrics for banks in central Texas were revisited, revealing that the FDIC recorded $63.8 million in assets alongside $53.8 million in deposits.
Following an investigation into the bank’s practices, the OCC found that substantial losses had occurred due to insecure operations. They determined that the bank was in a precarious position, with its obligations exceeding its asset value.
Regulators noted that around $2.8 million of Santa Anna’s deposits were over the FDIC insurance limits. As more information emerges, this number might shift, and the FDIC will evaluate possible access to uninsured funds for certain depositors.
The single branch of Santa Anna will reopen on Monday as part of the Coleman County State Bank, with Santa Anna depositors transitioning to this new institution. Coleman County State Bank, founded in 1936, purchased Santa Anna’s insured deposits at a premium, with plans to manage some of the remaining assets later.
Coleman County State Bank operates six branches in Texas and reported assets of $221.1 million as of late April.
In a statement, Coleman County State Bank expressed enthusiasm about integrating Santa Anna’s staff and continuing to meet the needs of their bank clients. Their commitment to Santa Anna and the broader community appears unwavering as they aim to bolster the surrounding regions.
At this time, Coleman County State Bank has not clarified how many employees from Santa Anna will join their team.
The first bank failure of the year was Pulaski Savings Bank based in Chicago, which collapsed in January. Millennium Bank from Death Plains, Illinois, is set to acquire Pulaski’s deposits and assets, following the FDIC’s findings of significant fraud impacting the bank, leading to an estimated $28 million burden on the deposit insurance fund.
A recent report highlighted ongoing challenges at Pulaski, revealing that its determined calculations indicate severe undercapitalization issues.
