WASHINGTON -(Dow Jones)- U.S. regulators announced Friday the closure of First State Bank, Camargo, Okla.
The Federal Deposit Insurance Corp. said the bank was being acquired by Bank 7 of Oklahoma City, which will assume all deposits.
The failure brings 2011's tally of closed banks to eight. The number of banks that failed last year--157--was the highest since the savings and loan crisis ended in 1992, although the total assets at those fallen banks was much smaller than the total the year before. That's because the trend has shifted to smaller banks that serve struggling local economies from larger banks that took on too much housing risk.
First State Bank was closed by the Oklahoma State Banking Department and was the first closure in Oklahoma this year. The bank had about $43.5 million in total assets and $40.3 million in total deposits with a single branch as of Sept. 30. On Monday, that branch will reopen as a branch of Bank 7.
Bank 7, which has three other locations in Oklahoma, agreed to purchase "essentially all of the assets" of First State Bank, the FDIC said.
Depositors at the failed bank will automatically become depositors of Bank 7, and their deposits will continue to be insured by the FDIC. The FDIC insures deposits for up to $250,000 per depositor.
Customers of First State Bank should continue to use their existing branch until they receive notice from Bank 7 that its other branches will process their accounts, the FDIC said.
Friday evening and over the weekend, depositors of First State Bank can continue banking activities such as writing checks and using ATMs or debit cards. Checks drawn on the bank will continue to be processed and loan customers should continue to make their usual payments.
The FDIC estimated that the cost of the failure will be $20.1 million. It said that Bank 7's acquisition was the least costly alternative.
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