WASHINGTON – Large and ongoing withdrawals of brokered deposits played a significant role in the failure of Columbian Bank & Trust here late last week, regulators are now saying.
The $752-million bank was placed into receivership by the FDIC, which reported that brokered deposits, which comprised 43% of the bank’s $622-million in deposits, were being pulled by customers and the bank was facing liquidity issues.
In addition, regulators said Columbian, the ninth bank to be shuttered by FDIC in 2008, also had been hit hard by lending it had done in Texas and Arizona.
The FDIC has since approved the assumption of $308 million of its insured deposits by $1 billion Citizens Bank and Trust Co., based in Chillicothe, Mo. The FDIC said Citizens paid a 1.125% premium for the failed bank's insured deposits and agreed to buy $85.5 million of its assets.
