Dive Brief:
- The Office of the State Bank Commissioner on Friday closed Almena State Bank in Kansas, making the two-branch, $65.8 million-asset institution the fourth U.S. bank to fail this year.
- Andover, Kansas-based Equity Bank will purchase roughly all of Almena's assets and all of the failed bank's deposits, the Federal Deposit Insurance Corp. (FDIC), which was appointed as receiver, said Friday in a press release. Almena State Bank had $64.8 million in deposits as of Sept. 30, the Norton Telegram reported.
- The FDIC estimates the bank failure will cost the Deposit Insurance Fund $18.3 million.
Dive Insight:
Almena's closure marks the second bank failure in a week. Florida regulators closed Fort Walton Beach-based First City Bank the previous Friday. State regulators have shuttered two other banks in 2020: West Virginia's First State Bank in April and Nebraska's Ericson State Bank in February.
The FDIC blamed Almena's closure on "longstanding capital and asset quality issues" unrelated to the coronavirus pandemic. The bank had lost more than $9.3 million since 2018 and had not turned an annual profit since 2017, American Banker reported.
Almena State Bank's locations in Almena and Norton, Kansas, were set to open Monday under the Equity Bank banner. Equity CEO Brad Elliott told the Wichita Business Journal the Almena purchase was strategically sound, allowing the $4.2 billion-asset bank to expand its footprint in the north of the state. Equity has a presence in Kansas, Missouri, Oklahoma and Arkansas.
