Most people would probably assume that a bank that can stay in business for almost one hundred years would be The Rock of Gibraltar from a financial standpoint. This was not the case today as state regulators closed 95 year old The Freedom State Bank located in Freedom, Oklahoma.
Founded in 1919 The Freedom State Bank was a community bank which took pride in its heritage of small town America. The small town America mentality inspired the Bank to model itself on the traits that made our country great including hard work, determination, family values, respect for others and the perseverance of the “Old West”.
Despite surviving for nearly a century The Freedom State Bank never expanded much beyond the town it served and at the time of its closing had only one branch and a mere $23 million in total assets.
After closing The Freedom State Bank, the Oklahoma State Banking Department appointed the FDIC as receiver to protect depositors. The FDIC sold the Bank to Alva State Bank & Trust, Alva, OK, which will assume all deposits of the failed bank.
The sole branch of The Freedom State Bank will reopen as a branch of Alva State Bank & Trust and depositors will have uninterrupted FDIC deposit insurance coverage up to the applicable limits. Over the weekend depositors of The Freedom State Bank will have access to their money through the use of debit cards, checking accounts, and ATM machines.
At March 31, 2014, The Freedom State Bank had total assets of $22.8 million and total deposits of $20.9 million. Besides assuming all deposits the Alva State Bank & Trust Company agreed to purchase $17.7 million of Freedom’s assets with the balance to be retained by the FDIC for later disposition. Alva State Bank also agreed to pay the FDIC a 1.0 percent premium on the assumed deposits of The Freedom State Bank.
The loss to the FDIC for the failure of The Freedom State Bank is $5.8 million. The Freedom State Bank is the 12th banking failure of the year and the second banking failure in Oklahoma. The previous bank failure in Oklahoma occurred on January 24, 2014 when regulators closed The Bank of Union, El Reno, OK.