On Friday, Lindsay First National Bank was shut down by the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) was appointed receiver. The OCC took action after identifying false and deceptive bank records that revealed the bank’s depleted capital and other information suggesting fraud. The OCC also found that the bank was in an unsafe or unsound condition to conduct business, and that the bank’s assets were below its obligations to creditors and others.
The OCC has referred the matter to the U.S. Department of Justice. The Department has a wide range of tools to hold individuals accountable for their criminal acts and remains victim-focused in all matters.
To protect depositors, the FDIC has entered into an acquisition and underwriting agreement with Duncan, Oklahoma-based First Bank & Trust, which will take over the insured deposits of failed banks. Lindsay First National Bank’s only office will reopen as a First Bank & Trust Co. branch on Monday, October 21, 2024 during regular business hours. All depositors of the closed bank automatically become depositors of First Bank & Trust. Co. and its insured deposits will continue to be covered by the FDIC. Customers do not need to change their banking relationship to maintain deposit insurance coverage.
Throughout the weekend, customers can access insured deposits via check, ATM or debit card, and checks drawn on the bank will continue to be processed. Customers with loans should continue making payments as normal.
The FDIC announced that 50% of the funds for uninsured deposits will be made available to depositors starting Monday, October 21, 2024, but that amount will increase as failed banks’ assets are sold. There is a possibility.
As of June 30, 2024, 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 exceed FDIC insurance limits, although this number may change as the FDIC collects more information from customers.
Customers with accounts over $250,000 are encouraged to contact the FDIC at 1-866-314-1744 for deposit advice. Phone lines will be available with extended hours over the weekend and into next week.
Starting Monday, depositors with accounts over $250,000 will be able to access the FDIC’s “Is my account fully insured?” To check your insurance coverage, please visit this webpage.
First Bank & Trust Co. has agreed to accept insured deposits at a 6.67 percent premium and will buy approximately $20 million in assets from First National Bank of Lindsay. The FDIC will hold the remaining assets for future disposition.
The preliminary cost to the FDIC’s Deposit Insurance Fund (DIF) of the bank’s failure is estimated at $43 million. Final costs may vary as the FDIC sells remaining assets. Alleged fraud has been cited as the cause of the bank’s closure and subsequent costs to DIF.
The closure of Lindsay First National Bank marks the second bank failure in the United States this year. The last time was on April 26, 2024, when Republic First Bank in Philadelphia, Pennsylvania, failed. In Oklahoma, the last bank to fail was Freedom State Bank in Freedom, Oklahoma, on June 27, 2014.
