Mid City Bank, Inc., Omaha, NE, became the nation’s 86th banking failure of 2011 after being closed by state regulators.
The FDIC, appointed as receiver, sold the failed bank to Purdum State Bank, Purdum, Nebraska, which will assume all deposits and purchase all assets of Mid City Bank. On Saturday, Purdum State Bank will change its name to Premier Bank. A spokesman for Premier Bank said “We plan to retain substantially all former Mid City employees.”
Mid City Bank, established in 1965, had five branches and was the 73rd largest bank in the State of Nebraska with $106.1 million in total assets. The pace of loan defaults at Mid City accelerated rapidly in 2011 and the Bank had a troubled asset ratio of 330% at June 30, 2011. Banks with a troubled asset ratio in excess of 100% invariably wind up failing and Mid City was no exception to this rule.
All branches of failed Mid City Bank will reopen on Saturday as branches of Purdum State Bank. Depositors will have access to their money over the weekend through the use of ATM, checks and debit cards. All depositors of failed Mid City Bank will automatically become depositors of Purdum State Bank and all deposits will continue to be insured by the FDIC up to the applicable insurance limits.
At September 30, 2011, Mid City Bank had total assets of $106.1 million and total deposits of $105.5 million.
Mid City was under regulatory scrutiny since November 2009 when the Bank signed a consent order issued by the FDIC which required management to restore the Bank to a satisfactory financial condition and to correct numerous operational and management deficiencies.
The cost to the FDIC Deposit Insurance Fund for the failure of Mid City Bank is $12.7 million. Mid City Bank is the nation’s 86th banking failure and the first in Nebraska.