OCC closes Oklahoma bank, suggests fraud involved

On Friday, the OCC appointed the FDIC as receiver for The First National Bank of Lindsay, Lindsay, Oklahoma, after identifying false and deceptive bank records and other information suggesting fraud that revealed depletion of the bank’s capital. The OCC also found that the bank was in an unsafe or unsound condition to transact business and that the bank’s assets were less than its obligations to its creditors and others.

The OCC is also referring this matter to the United States Department of Justice, which has a wide variety of tools to hold individuals accountable for criminal acts and focuses on victims in all of its matters.

To protect depositors of the failed bank, the FDIC entered into a purchase and assumption agreement with First Bank & Trust Co., Duncan, Oklahoma, to assume the insured deposits of The First National Bank of Lindsay.

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.

The FDIC preliminarily estimates that the failure will cost its Deposit Insurance Fund (DIF) about $43 million. The estimate will change over time as the assets are sold. Alleged fraud caused the failure of the bank and cost to the DIF.

The First National Bank of Lindsay is the second bank to fail in the U.S. this year. The last bank failure was Republic First Bank, in Philadelphia, Pennsylvania, on April 26, 2024. The last failure in Oklahoma was The Freedom State Bank, in Freedom, Oklahoma. on June 27, 2014.