The First State Bank, Camargo, OK, Closed By Regulators

January 28, 2011 – The First State Bank, Camargo, OK, was closed today by the Oklahoma State Banking Department which appointed the FDIC as receiver.   To protect depositors, the FDIC sold First State to Bank 7, Oklahoma, City, OK.   Bank 7 will assume all deposits and also agreed to purchase all of the assets of failed First State.

The First State Bank was a very small, one branch, privately owned bank established in 1911.  At September 30, 2011, the Bank had total assets of $43.5 million and total deposits of $40.3 million.  Depositors will have access to their money over the weekend through checking, debit cards or ATM transactions.   The First State Bank will reopen on Monday as a branch of Bank 7.

In an age when almost any information can be accessed on the web, The First State Bank remained mired in a past age, apparently unable or unwilling to launch a web site.  The Bank had a small staff estimated at only 7 employees.

The First State Bank was hopelessly insolvent as indicated by the fact that the estimated loss to the FDIC Deposit Insurance Fund is $20.1 million or a huge 46.2% of total assets.

As consolidation in the banking industry continues, small banks are increasingly unable to raise additional capital or compete with larger institutions.  The FDIC has 860 Banks on the Problem Bank List, accounting for over 11% of the nation’s banks.  Total assets of all Problem Banks total $379.2 billion or approximately $441 million per problem bank.

The largest banks in the U.S. expanded during the depths of the financial crisis by taking over other large troubled institutions.  The 20 largest banks in the U.S. now control 70% of the entire banking system’s assets.  As smaller banks continue to fail, this trend toward asset concentration in the largest banks will increase.

Bank 7 is a well capitalized bank established in 1901 and has approximately $130 million in assets.  Prior to today, Bank 7 had not acquired any other failed banks.

The First State Bank failure is the eight banking failure of the year and the first in Oklahoma.