WASHINGTON — The Columbian Bank and Trust Company, in Topeka, Kan., became the ninth failed bank of the year late Friday.
The state's banking commissioner closed the $752 million-asset bank after it had suffered a $5.2 million loss in the second quarter. It is the first bank to fail in Kansas since 1993.
The Federal Deposit Insurance Corp., appointed as the failed bank's receiver, approved the assumption of $308 million of Columbian's insured deposits by Citizens Bank & Trust Co., a $1 billion-asset bank in Chillicothe, Mo.
Columbian failed with about $46 million in uninsured deposits in an estimated 610 accounts. It also carried a hefty chunk of brokered deposits: $268 million. The FDIC will pay the insured portion of that amount directly to brokers.
Columbian's failure is one of a series of recent collapses that have hit the industry as the turbulent real estate market is spreading onto banks' balance sheets.
Its direct cause of the failure was unclear late Friday, but published reports had said Columbian had made commercial real estate bets in out-of-state markets – including Arizona and Texas – a growth plan reminiscent of other troubled institutions.
The failure is the fourth collapse since the dramatic failure on July 11 of $32 billion-asset IndyMac Bancorp in Pasadena, Calif., and the second failure of a bank this month.
The FDIC said Citizens paid a 1.125% premium for the failed bank's insured deposits, and also agreed to buy $85.5 million in Columbian's assets. The failure is estimated to cost the Deposit Insurance Fund about $60 million, the FDIC said.
Columbian's nine branches will reopen on Monday as branches of Citizens.
"Our customers in these communities will be greeted by familiar faces in their banks. Many of Columbian's employees will be asked to join our team," Citizens Chairman Bill Young said in a press release.
On Aug. 1, the FDIC closed the doors of $259 million-asset First Priority Bank in Bradenton, Fla. A week earlier, the agency responded to the failures of $3.4 billion-asset First National Bank of Nevada, in Reno, and $254 million-asset First Heritage Bank, in Newport Beach, Calif. The two banks, both subsidiaries of First National Bank Holding Co. in Scottsdale, Ariz., were closed by the Office of the Comptroller of the Currency.