Bank Abruptly Shut Down by US Regulators in Second Bank Failure of 2024

Financial regulators just shut down a bank in Oklahoma, marking the second US bank failure of 2024.

The First National Bank of Lindsay has been shuttered by the Office of the Comptroller of the Currency.

The agency says it took action after identifying false and deceptive bank records and other information that suggests fraud depleted the bank’s capital.

“The OCC also found that the bank was in an unsafe or unsound condition to transact business and that the bank’s assets were less than its obligations to its creditors and others.”

The OCC is also forwarding the matter to the US Department of Justice.

The Federal Deposit Insurance Corporation says it locked the bank’s doors before the weekend began.

All insured deposits were sent to First Bank & Trust Co. in Duncan, Oklahoma. About $7.1 million of uninsured deposits did not pass. The bank recently reported $97.5 million in total deposits and $107.8 million in total assets.

The first bank failure of 2024 was Philadelphia-based Republic Bank, which collapsed amid significant financial losses, inadequate capital reserves and issues with asset quality.

This followed a series of high-profile failures in 2023, including Silicon Valley Bank, Signature Bank and First Republic Bank.

SVB and First Republic collapsed due to similar issues of liquidity pressures, poor risk management and unrealized losses on securities.

Despite having adequate capital, regulators said Signature Bank witnessed a rapid outflow of deposits that required a need to step in.

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