Columbian Bank and Trust of Kansas Fails, closed by U.S. Regulators

August 24, 2008 by · Leave a Comment
Filed under: Bank Failure, Industry News 

Here is another bank failure with more to come most likely in this current economic environment. With more loans going default, this will wreck the balance sheets of certain banks and trust companies. I don’t want to think about what will happen if the Federal Reserve decides to raise prime interest rates before the banking system finishes de-leveraging.

Inflation is on the rise without many signs of it abating, it will make it more difficult for The Fed to keep rates so low. There has been a pretty large amount of open discourse against keeping rates at this level.

Article:

Columbian Bank and Trust Co. of Topeka, Kansas, was closed by U.S. regulators, the nation’s ninth bank to collapse this year amid bad real-estate loans and writedowns stemming from a drop in home prices.

The bank, with $752 million in assets and $622 million in total deposits, was shuttered by the Kansas state bank commissioner’s office and the Federal Deposit Insurance Corp., the FDIC said yesterday in a statement.

Citizens Bank and Trust will assume the failed bank’s insured deposits. Columbian Bank’s nine branches will open Aug. 25 as Citizens Bank and Trust offices, the FDIC said. Customers can access their accounts over the weekend by writing checks or using ATM or debit cards.

“There is no need for customers to change their banking relationship to retain their deposit insurance coverage,” the FDIC said.

The pace of bank closings is accelerating as financial firms have reported more than $500 billion in writedowns and credit losses since 2007. The FDIC’s “problem” bank list grew by 18 percent in the first quarter from the fourth, to 90 banks with combined assets of $26.3 billion.

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