Dedicated to Deposits: Deals, Data, and Discussion

Feds Close a Kansas Bank - Ninth Closure of the Year

POSTED ON BY

The streak of Fridays without any bank closures ended today with the closure of Columbian Bank and Trust Company, Topeka, KS. Here's the FDIC's press release link, and here's a summary of the closure (in a new format):
  • Closed Bank: Columbian Bank and Trust Company
  • Location: Topeka, KS
  • Size: 9 branches, $752 million assets, $622 million deposits
  • Possible Uninsured Deposits: 610 accounts, $46 million
  • Acquiring Bank: Citizens Bank and Trust, Chillicothe, Missouri
  • Payments of Uninsured Deposits: No mention of any immediate payments
  • Cost to Deposit Insurance Fund: $60 million (estimated)
  • 2008 closures: 9th bank to be closed this year
  • Financial Ratings: 2 stars (0=lowest) at BauerFinancial, 3 stars (1=lowest) at Bankrate.com

For those who have deposits over the insured limits, I don't see any mention of immediate payouts. In several past closures including IndyMac's failure, 50% of the uninsured deposits were paid.

When a bank is closed by the Feds, we can see how the financial rating services performed. In this case, BauerFinancial did a little better than Bankrate. BauerFinancial had given it 2 stars (problematic). The bank had 3 stars (performing) at Bankrate. As these ratings show, it's very hard to predict a closure based on ratings so it's best just to stay under the FDIC limits.

I was worried we may see another Friday bank failure after yesterday's FDIC press release titled How to Get a Good Night's Sleep with FDIC Insurance. I was thinking it might be intended to reduce the public's anxiety as more banks close. We'll see if any more banks fail today.

I looked back in my archives, and I don't seem to have any posts on this bank, and they weren't advertising any high rates on their website as of this afternoon.

The last bank failure was on August 1st, when a small Florida bank failed. Please see my Facts about FDIC and NCUA Post for more general info and references.

Related Posts

Comments
4 comments.
Comment #1 by Anonymous posted on
Anonymous
Amazing that after the well-publicized closure of IndyMac Bank there are still people who leave uninsured money in a bank.

1
Comment #2 by Mocirne (anonymous) posted on
Mocirne
True... on the one hand, as BankingGuy pointed out, the rating for the bank was nowhere in the red. However, especially in today's financial environment, everyone should be wary of going over the FDIC limits on small banks with relatively low assets, no matter what their apparent rating is.

1
Comment #3 by Anonymous posted on
Anonymous
It is not surprising to me at all that there are so many people with funds exceeding FDIC insurance even after so many publication regarding this matter before.

I would imagine an average person who would keep more than $100K in one bank is an elderly lady who never pays her bills online, who never reads any financial information etc. These people are merely not interested in this matter as they have more important things to do: keep their garden neat, bake a Sunday apple pie, go to church every Sundays, watch General Hospital every day at 1 pm, etc.

I think it should be a law when someones deposit amount exceeds the FDIC limit, this person must be notified by the bank of the possible consequences. Otherwise there will always be people who don't care or not literate enough to understand what can happen.

1
Comment #4 by Anonymous posted on
Anonymous
It is possible that some of the reported 60 mil in uninsured funds consists of POD accounts with over 100k but still fully covered. The initial estimate (of 60 mil) usually counts all accounts over 100k IMO.

1