First Capital Bank, Kingfisher, OK, Closed By Regulators After 110 Years Of Operation

Any bank that can stay in business for 110 years must have been doing something right.  First Capital Bank, originally founded in 1902 as Guthrie Savings Bank, provided banking services to its customers at a time when Oklahoma was not yet a state and Guthrie was the capital of the Oklahoma Territory.

The long and colorful history of First Capital Bank came to an unfortunate end today when the Bank was closed by the Oklahoma State Banking Department.  The FDIC, acting as receiver, sold the failed bank to F&M Bank, Edmond, OK, which will assume all deposits of First Capital Bank.

Despite the Bank’s long history, First Capital Bank had only one branch.  Total assets of First Capital had declined from $119 million in March 2011 to only $46.1 million on March 31, 2012.  A Consent Order issued by the FDIC in October 2010 ordered the Bank to initiate an asset reduction plan to rebuild capital.  First Capital Bank was a wholly owned subsidiary of holding company FCB Holdings, Inc. of Guthrie, OK.

First Capital Bank offered a full range of personal and commercial banking services.  According to First Capital Bank’s website, the Bank was proud of being a locally owned bank which offered superior customer service.

We are a locally-owned community bank dedicated to offering our customers a superior level of service. One-on-one contact is our primary focus and our telephones are answered by people, not machines. Most importantly, we live here, work here, play here… and make all of our decisions here locally. We know our customers, their businesses, and the ins and outs of this marketplace. It is our vision to be a core member of our community, helping them prosper and grow.

Depositors of failed First Capital Bank automatically become depositors of F&M Bank, retaining full FDIC deposit insurance up to the applicable limits.  First Capital Bank will reopen on Saturday as a branch of F&M Bank.  Over the weekend, depositors of First Capital Bank will have full access to their money through the use of checks, ATM and debit cards.

First Capital Bank had been under regulatory scrutiny for some time.  In October 2010, the Bank signed a Consent Order with the FDIC in which it agreed to take specified steps in order to increase the Bank’s capital.  Given the poor performance of many small banks in a weak economy, it came as no surprise that First Capital was unable to raise additional capital from investors.  In addition, the Bank experienced a sharp uptrend in nonperforming loans during 2011.  First Capital Bank had an extremely high troubled asset ratio of 427% in March 2012.  Typically, a bank will wind up failing once the troubled asset ratio exceeds 100%.

Under the terms of the purchase and assumption agreement worked out between the FDIC and F&M Bank, the FDIC will receive a substantial premium of 7.65% on the deposits assumed by F&M Bank.  In addition to acquiring the deposits of First Capital, F&M agreed to purchase a significant portion of First Capital’s assets.  F&M agreed to purchase $40.7 million or 88% of the failed Bank’s assets, with the remaining balance to be retained by the FDIC for later disposition.

At March 31, 2012, First Capital Bank had total assets of $46.1 million and total deposits of $44.8 million.

The estimated cost to the FDIC Deposit Insurance Fund (DIF) for the failure of First Capital Bank is $5.6 million.  First Capital Bank becomes the nation’s 25th banking failure of 2012 and the first bank failure in Oklahoma.