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|Costly Bank Failure Friday
Recent mortgage-related closings and failures
Jan. 27, 2014
By Mortgage Daily staff
|The failure last week of a bank in Oklahoma is expected to cost the nation's bank insurance fund around $70 million.
At 3 p.m. local time on Friday, officials from the Oklahoma State Banking Department stormed in and seized The Bank of Union and shut it down.
In a news release, the state said its decision to close the bank was due to an "exhaustion of capital funds as a result of significant loan losses."
The Bank of Union was established in 1900. As of Sept. 30, 2013, it employed 67 people.
It owned $31 million in one- to four-family residential loans, $40 million in commercial real estate loans and $6 million in construction-and-land-development loans.
In August 2013, parent Union City Corp. entered a written agreement with the Federal Reserve Bank of Kansas City.
The Federal Deposit Insurance Corp., which was named receiver of the El Reno, Okla.-based bank, named BancFirst the winner in a secret bidding process.
BancFirst acquired $226 million of the failed bank's $331 million in total assets and assumed all of its $329 million in deposits.
The FDIC projected that losses to its Deposit Insurance Fund will reach $70 million as a result of The Bank of Union's demise.
It was only the second FDIC-insured bank failure this year.
Last week, the National Credit Union Administration announced that it liquidated Bagumbayan Credit Union of Chicago.
Bagumbayan was originally seized by the NCUA in December and placed into conservatorship, with Great Lakes Credit Union of North Chicago stepping in to service Bagumbayan's 44 members and $55,140 in deposits.
"NCUA, with approval from the Illinois Department of Financial and Professional Regulation, made the decision to liquidate Bagumbayan Credit Union and discontinue its operations to protect the credit union from continued financial deterioration," the latest announcement said.
Mortgage Daily has tracked the closing or failure of three mortgage-related entities so far in 2014.
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