Bank Failure Facts
On Friday October 18th, 2024, The First National Bank of Lindsay in Lindsay, Oklahoma was closed by the Office of the Comptroller of the Currency (OCC.) The FDIC was appointed as receiver, and has entered into a purchase and assumption agreement with First Bank & Trust Co. of Duncan, Oklahoma to protect depositors and assume the insured deposits of the failed bank.
As of June 30th, 2024, The First National Bank of Lindsay reported total assets of $107.8 million, and total deposits of $97.5 million. Approximately $7.1 million of these deposits are uninsured, with the FDIC expecting that amount may change as it obtains more information from depositors. The FDIC is prepared to make 50% of uninsured funds available to those depositors as of Monday, October 21st, 2024. As the FDIC sells assets of the failed bank, this amount may change. The full press release regarding this bank failure can be accessed via the FDIC’s website.
Ampersand’s Perspective
The failure of The First National Bank of Lindsay highlights an important issue facing depositors today - the risk of uninsured deposits. The FDIC protects deposits up to $250,000 per tax id, per ownership type, per covered institution. This means that all deposits that exceed this limit or do not meet this criteria may be at risk due to bank failure. As of May 2023, there were approximately $7.7 Trillion Dollars of uninsured deposits in the financial system, and that number is likely very similar today. This presents a significant risk not only to the financial system, but to individual depositors and the broader US economy.
Although the FDIC has stated that they will make 50% of uninsured funds available to depositors of The First National Bank of Lindsay, these uninsured deposits are not required to be covered by the FDIC, or any other entity. It is vital that all depositors understand this is not a guarantee if you have uninsured deposits, and it’s important to understand if your deposits are fully protected. You can determine if your bank is covered by the FDIC by visiting their BankFind Suite, and learn more about how the FDIC protects deposits via their detailed resources page on this topic.
Ensuring that there is a healthy, protected deposit base across US banks is a vital part of ensuring our economic success. Healthy banks, specifically community banks, help drive business growth, community development, and job creation. Protected deposits provide depositors peace of mind and ensure they will continue to keep their deposits with their banking partners. Moreover, when large depositors take advantage of deposit protection options, they are protecting their ability to continue to expand their business, make investments, and earn interest income.
Deposit protection isn’t just important because it prevents individual losses. It’s crucial for our economy, and the long term success of the US.
*Please Note: This blog contains Ampersand’s perspective on the necessity of deposit protection. Ampersand, Inc. is not an FDIC/NCUA insured bank/credit union and deposit insurance covers the failure of an insured bank/credit union. Additionally, certain conditions must be satisfied for pass-through deposit insurance coverage to apply.
Keep your deposits safe, and understand your deposit protection options. Contact Ampersand to get started.
