About $1.2 million will be the cost to the federal bank deposit insurance agency following the failure of a tiny Indiana bank Friday, which the federal agency said late that day was the “smallest standalone bank in the United States.”
Kentland Federal Savings and Loan Association of Kentland, Ind. was closed Friday by the Office of the Comptroller of the Currency (OCC). The Federal Deposit Insurance Corporation (FDIC) was appointed as receiver by the national bank regulator.
The OCC said it closed the small bank after finding it had “experienced substantial dissipation of assets and earnings due to unsafe and unsound practices.” The agency said it also found the bank “incurred losses that depleted its capital, the bank is critically undercapitalized, and there is no reasonable prospect that the bank will become adequately capitalized.”
The FDIC said the bank, as of March 31, reported total assets of $3.73 million and total deposits of $3.65 million.
The insurance agency said “substantially all assets” of the small bank would be purchased by another bank in the town known as Kentland Bank – which it made a point of noting it has no affiliation with the closed institution. Kentland Bank would also assume all deposits of the closed, smaller bank.
The sole branch of the small bank will also be permanently closed, the FDIC said.
Kentland Bank Assumes All Deposits of Kentland Federal Savings and Loan Association
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