MercoPress. South Atlantic News Agency

Third US bank failure in 2008; regulators to increase staff

Fed regulators close Arkansas bank ANB Financial

The United States ANB Financial National Association Arkansas based banks have been closed by the Office of the Comptroller of the Currency after discovering “unsafe and unsound” business practices there. The Federal Deposit Insurance Corporation has named a receiver.

David Barr, a spokesman for the FIDC said that customers served by the bank's nine locations with accounts fewer than 100,000 US dollars will be fully insured by the US government. Barr says customers can continue to write checks and draw money from ATMs through the weekend. The FDIC said in a statement that while ANB Financial's failure is the third FDIC-insured institution to be closed so far in 2008, there were a total of three such closures last year. Barr said Pulaski Bank and Trust Co. agreed to assume control over ANB Financial's bank locations, which will be open Monday. As of January 31, federal regulators said ANB Financial had about 2.1 billion US dollars in assets and 1.8 billion in total deposits. It was the third closure this year of an FDIC-insured bank. Douglass National Bank, a Missouri bank with 58.5 million in assets, was shut in January; another Missouri institution with assets of 18.7 million, Hume Bank, was shut down in March. But both were dwarfed in size of ANB Financial, where regulators found lax lending standards, mostly for construction and development loans for projects in Utah, Idaho and Wyoming, as well as Arkansas. Observers have been watching for signs of bank distress resulting from the mortgage crisis. Profits at federally insured US banks and thrifts plunged to a 16-year low in the fourth quarter as institutions set aside a record-high amount to cover losses from sour mortgages. The FDIC is planning to beef up its staff, including temporarily hiring up to 25 retired FDIC employees who worked in the agency's more than 200-person division that handles failed banks.