Banks Close In Texas, Kansas
Undated (AP) _ State and federal banking authorities closed two insolvent banks in Texas and Kansas on Thursday, boosting the number of U.S. bank failures this year to 104.
The Comptroller of the Currency declared Heritage National Bank in Richardson, Texas insolvent and appointed the Federal Deposit Insurance Corp. as receiver.
The bank, the 19th to fail this year in Texas, was to reopen Friday as Brookhollow National Bank, a newly chartered subsidiary of Brookhollow Bancshares Inc. of Dallas, said FDIC spokeswoman Julie Amberson.
Dale Underwood, a spokesman for the comptroller’s office, said the failure stemmed mainly from inadequate supervision by the board of directors and speculative lending practices. More than a third of the bank’s loan portfolio consisted of loans to insiders and their interests.
Brookhollow National will assume about $30.1 milion in 3,500 deposit accounts and has agreed to pay the FDIC a purchase premium of $290,000, Ms. Amberson said. It also will buy some of the failed bank’s loans and other assets for $162 milllion.
The FDIC will advance $13.6 million to the assuming bank and will retain assets valued at about $17.7 million, Ms. Amberson said.
Heritage National had assets on June 30, 1986 of about $33 million, deposits of $30 million.
Also closed Thursday was the Home State Bank of LaCrosse, Kan., which was declared insolvent by state banking authorities.
The FDIC said the bank, the 12th to fail this year in Kansas, would reopen Friday as a branch of the Farmers Bank and Trust, of Albert.
Ms. Amberson said The Home State Bank had assets totaling $13.7 million. She said Farmers Bank and Trust would assume about $12.4 million in 3,400 deposit accounts and had agreed to pay the FDIC a purchase premium of $312,000.
Farmers Bank and Trust also would purchase certain loans and other assets of the failed bank for $5.9 million, Ms. Amberson said. The FDIC will advance Farmers Bank and Trust $6.5 million and will retain $7.8 million worth of assets of the failed bank.
Officials said about 47 percent of the bank’s $10.7 million loan portfolio were agriculture-related, and excessive loan losses stemming from the bad farm economy and the bank’s lending practices depleted its capital.