CHICAGO: The economic downturn that griped the US economy for nearly three years since 2008 has taken toll of another Indian owned bank in Chicago. The National Republic Bank of Chicago (NRB) was closed last week by the Office of the Comptroller of the Currency, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver.
To protect the depositors, the FDIC entered into a purchase and assumption agreement with State Bank of Texas, Dallas (SBT), Texas, to assume all of the deposits of The National Republic Bank of Chicago.
SBT is ranked as one of the top performers in the banking world in the country. Based on an analysis of data from more than 6,600 banks in US, Sageworks, a financial information company, identified the 15 best-run community banks using a combination of their return on average assets (ROAA) and efficiency ratio.
It found that the State Bank of Texas, headquartered in Dallas, with assets around $413 million, topped the list as the best-run community bank in the country.
The analysis was based on its 2014 year-to-date ROAA and efficiency ratio. Rounding out the top five were banks in two institutions in Minnesota, as well as Utah and Alabama. Community banks with between $100 million and $10 billion in assets – a total of 4,566 banks – were evaluated for the list. Chandrakant Patel, a no nonsense business person with two Masters under his belt, is the founder of the bank and heads it as CEO and President.
The two branches of the NRB reopened as branches of State Bank of Texas during their normal business hours. Depositors of NRB will automatically become depositors of State Bank of Texas. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage up to applicable limits.
Depositors of NRB can continue to access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.
As of June 30, 2014 NRB had approximately $954.4 million in total assets and $915.3 million in total deposits. In addition to assuming all of the deposits of The National Republic Bank of Chicago, State Bank of Texas agreed to purchase approximately $626.1 million of the failed bank’s assets. The FDIC will retain the remaining assets for later disposition.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $111.6 million. Compared to other alternatives, State Bank of Texas’ acquisition was the least costly resolution for the FDIC’s DIF. NRB is the 16th FDIC-insured institution to fail in the nation this year, and the fifth in Illinois.
Three years ago Mutual Bank owned by other Indian businessmen was taken over by United Central Bank. There was a change again and the control to the Bank was passed on to Los Angeles-based Hanmi Financial Corp through a $50 million deal a few months ago.
The deal resulted in Hanmi to buy the parent of Garland, Texas-based United Central Bank, best known for acquiring the assets and deposits four years ago of the Chicago area’s costliest failure, Mutual Bank of Harvey. The deal made Hanmi the largest Korean-American-owned lender in the Chicago area.
Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation’s banking system. The FDIC insures deposits at the nation’s banks and savings associations, 6,656 as of June 30, 2014. It promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. The FDIC receives no federal tax dollars – insured financial institutions fund its operations.
Ramesh Soparawala
India Post News Service
Thank You For Your Vote!
Sorry You have Already Voted!
