OCC shutters small Texas bank due to suspected fraud

The Santa Anna National Bank in Texas was shut down Friday by the Office of the Comptroller of the Currency, marking the second bank failure of 2025.

The Federal Deposit Insurance Corp. took over the $63.8 million-asset bank as receiver, and agreed to sell the failed bank's deposits and some assets to Coleman County State Bank. The OCC shut down the bank after it "experienced substantial dissipation of assets and earnings due to unsafe or unsound practices," the agency said in a Friday evening announcement. The FDIC said in its Friday statement that "suspected fraud" had contributed to the failure.

The Santa Anna National Bank was also in an "unsafe or unsound condition to transact business" and its assets were less than its obligations to creditors and others, the OCC said. 

In mid-April, the bank had nearly $77 million of assets and $71 million of deposits, according to regulatory filings. But the FDIC said that as of June 18, the bank's assets had fallen some 17% and deposits had decreased by nearly one-quarter — to $63.8 million of assets and $53.8 million of deposits.

The bank also had about $2.8 million of deposits that exceeded the FDIC's insurance limits, but the regulator said that amount is "likely to change" when it can obtain more information from customers. The FDIC said once it has more details, it will determine whether to provide uninsured depositors with access to a portion of their uninsured funds.

Coleman County State Bank, based just a few miles away from Santa Anna National Bank, agreed to buy the insured deposits for a 5.16% premium. The FDIC will retain a large portion of the failed bank's assets until it can sell them at a later date.

The FDIC estimates the bank failure will cost $23.7 million to its deposit insurance fund, or about 15% of the bank's total assets, but noted that that number will change as the assets are sold. 

The Santa Anna National Bank's sole office will reopen on Monday as a branch of Coleman County State Bank, and its depositors will become customers of the acquirer.

Fraud

Some of the costliest bank failures have one thing in common

When a Chicago bank crashed, delivering a major blow to the Deposit Insurance Fund, regulators said they suspected fraud. Historically, that's a common story.

By Kevin Wack

June 9

The bank's collapse follows the failure of Pulaski Savings Bank in Illinois five months ago, which also went belly-up due to suspected fraud. According to a review from the FDIC earlier this month, Pulaski hadn't seen positive core earnings for two decades, but the nail in its coffin was when at least $20 million went missing from its core system at the end of last year.

"Since assets corresponding with these deposits were not identified, the recording of these deposits exceeded the bank's equity capital, at which point, the bank became critically undercapitalized," the FDIC inspector general's office wrote.

Pulaski's failure cost the FDIC's deposit insurance fund $28.5 million, or about 58% of the bank's $49.5 million of assets, marking the most expensive bank failure since at least 2019.

In the majority of bank failures in the last 90 years, the loss to the government insurance fund was less than 20% of the bank's assets, according to FDIC data. 

Major outliers seem to align with fraud charges, according to an American Banker analysis.

Last fall, the First National Bank of Lindsay in Lindsay, Okla. also failed due to "false and deceptive bank records" that suggested fraud, regulators said when they shuttered the $107 million-asset company.