Friday, August 12, 2011

This Week in Bank Failures

The stock market gyrations this month have shown all the signs of a panic liquidation of assets by a major financial institution, but no one knows which of the world’s major banks might be involved. Banks in France had to issue public denials after days of finger-pointing, as did two of the largest banks in the United States. Stock transactions are secret, and the various theories that have been floated in the financial news media about a bank in financial distress lack the kind of specificity that would make them credible.

A billion-dollar bank failed tonight in Olathe, Kansas. First National Bank of Olathe had shrunk to half its 2008 size by the time the O.C.C. closed it tonight. The failed bank had been in business since 1887, but had been expanding rapidly in 2007 and 2008, which left it in a precarious financial condition in 2009.

Enterprise Bank & Trust is taking over the deposits, paying an unusually high 1.5 percent premium to expand its footprint with six more branches in the Kansas City area. It is also purchasing the assets.