First National Bank Of Lindsay Closes, FDIC Takes Over Deposits

Friday, The First National Bank of Lindsay was closed by the Office of the Comptroller of the Currency (OCC), with the Federal Deposit Insurance Corporation (FDIC) appointed as receiver. The OCC acted 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 referring the 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, the FDIC has entered into a purchase and assumption agreement with First Bank & Trust Co., based in Duncan, Okla., which will assume the insured deposits of the failed bank. The sole office of The First National Bank of Lindsay will reopen as a branch of First Bank & Trust Co. during its normal business hours on Monday, October 21, 2024. All depositors of the closed bank will automatically become depositors of First Bank & Trust Co., and their insured deposits will continue to be covered by the FDIC. Customers are not required to change their banking relationship to maintain deposit insurance coverage.

Over the weekend, customers will still have access to their insured deposits via checks, ATMs, or debit cards, and checks drawn on the bank will continue to be processed. Loan customers should continue making payments as usual.

For uninsured deposits, the FDIC has announced it will make 50 percent of those funds available to depositors starting Monday, October 21, 2024, with the possibility of increasing that amount as assets from the failed bank are sold.

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. About $7.1 million of the deposits exceeded FDIC insurance limits, though this figure may change as the FDIC gathers more information from customers.

Customers with accounts exceeding $250,000 are advised to contact the FDIC at 1-866-314-1744 for assistance in discussing their deposits. The phone line will be operational throughout the weekend and into next week, with extended hours.

Beginning Monday, depositors with accounts over $250,000 can visit the FDIC’s "Is My Account Fully Insured?" webpage to verify their insurance coverage, HERE.

First Bank & Trust Co. has agreed to assume the insured deposits at a premium of 6.67 percent and will purchase around $20 million of The First National Bank of Lindsay's assets. The FDIC will retain the remaining assets for future disposition.

The preliminary cost of the bank’s failure to the FDIC’s Deposit Insurance Fund (DIF) is estimated to be $43 million. The final cost may fluctuate as the FDIC sells off the remaining assets. Alleged fraud is cited as the cause of the bank's closure and the subsequent cost to the DIF.

The closure of The First National Bank of Lindsay marks the second bank failure in the United States this year. The last occurred when Republic First Bank in Philadelphia, Penn., failed on April 26, 2024. In Oklahoma, the last bank failure was The Freedom State Bank in Freedom, Okla., on June 27, 2014.