Thread: Douglass National Bank fails

Douglass National Bank fails
By MARK DAVIS
The Kansas City Star

Douglass National Bank’s failure is the first in the Kansas City area since Superior National Bank failed in April 1994.

Douglass National Bank, the Kansas City area’s only black-owned bank, failed Friday under the weight of mounting loan problems. It will reopen Monday as part of a Louisiana bank.

The bank’s failure is the first in the nation this year and the first in the area since Superior National Bank failed in April 1994.

Douglass’ two Kansas City, Kan., offices and one in Kansas City will reopen as branches of Liberty Bank and Trust Co. of New Orleans.

Liberty is a profitable $327 million bank with 14 branches in Louisiana, Mississippi and Texas.

The Web site for Liberty said that it was founded in 1972 and that it is one of the five largest African-American-owned banks nationally.

Douglass has struggled with mounting loan problems and operated under March 2006 orders from regulators to improve its dwindling capital strength.

In the last two years, losses had reached $5.6 million, and more than 20 percent of the bank’s remaining loans were still considered problems as of the end of December.

Douglass officials did not respond to inquiries Friday afternoon.

The Office of the Comptroller of the Currency, which regulates nationally chartered banks, closed Douglass after its regular business hours Friday and appointed the Federal Deposit Insurance Corp. to be receiver. The FDIC said it sold $55.7 million of Douglass’ assets to Liberty Bank and Trust at book value, less a discount of $6.1 million.

Depositors’ accounts transferred automatically to Liberty Bank and Trust. The FDIC said customers could access their money this weekend by writing checks and using debit or automated teller cards.

Customers can seek additional information by calling 888-206-4662 or visiting www.fdic.gov/bank/individual/failed/douglas.html.

“Liberty’s a good bank,â€

Failed Bank Information Douglass National Bank, Kansas City, MO, Closing Information

1. Introduction
2. Press Release
3. Acquiring Financial Institution
4. Question and Answer Sheet
5. Banking Services
6. Loan Customers
7. Possible Claims Against the Failed Institution
8. Priority of Claims
9. Dividend Information

I. Introduction

On January 25, 2008, Douglass National Bank, Kansas City, MO was closed by the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation (FDIC) was named Receiver. No advance notice is given to the public when a financial institution is closed.

The FDIC has assembled useful information regarding your relationship with this institution. Besides a checking account, you may have Certificates of Deposit, a car loan, a business checking account, a commercial loan, a Social Security direct deposit, and other relationships with the institution. The FDIC has compiled the following information which should help answer many of your questions.
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II. Press Release

The FDIC has issued a press release (PR-7-200 about the institution’s closure. If you represent a media outlet and would like information about the closure, please contact David Barr at 202-898-6992.
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III. Acquiring Financial Institution

All deposit accounts have been transferred to Liberty Bank and Trust Company, New Orleans, LA ("assuming institution") and will be available as usual. Office hours will resume Monday January 28, 2008 at the former Douglass National Bank.

These transferred deposits will be separately insured from any accounts you may already have at Liberty Bank and Trust Company for six months after the failure of Douglass National Bank. Checks that were drawn on Douglass National Bank that did not clear before the institution closed will be honored as long as there are sufficient funds in the account. You may speak to an FDIC representative regarding deposit insurance by calling 1-877-ASK-FDIC (1-877-275-3342) or visit EDIE the FDIC's Electronic Deposit Insurance Estimator.

EDIE - FDIC's Electronic Deposit Insurance Estimator

You may withdraw your funds from any transferred account without an early withdrawal penalty until you enter into a new deposit agreement with Liberty Bank and Trust Company (as long as the deposits are not pledged as collateral for loans.) You may view more information about Liberty Bank and Trust Company by visiting their web site.

Liberty Bank and Trust Company
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V. Banking Services

You may continue to use the services to which you previously had access, such as automatic teller machines, safe deposit boxes, night deposit boxes, wire services, etc.

Your checks will be processed as usual. All outstanding checks will be paid against your available insured balance(s) as if no change had occurred. Liberty Bank and Trust Company will contact you soon regarding any changes in the terms of your account. If you have a problem with a merchant refusing to accept your check, please contact Liberty Bank and Trust Company, Customer Service Department, at 1-913-321-7200. An account representative will clear up any confusion about the validity of your checks.

After January 25, 2008, your account will earn interest at a rate determined by Liberty Bank and Trust Company. You will be notified by letter regarding this matter.

Your automatic direct deposit(s) and/or automatic withdrawal(s) should be transferred automatically to your assuming institution. You should contact your assuming institution, however, to discuss your account(s) and to insure that service is not delayed or discontinued.

All your deposit account histories and records will be transferred to your assuming institution. If your assuming institution requires any additional signatures or forms, it will notify you. If you have any questions or special requests, you may contact a representative of your assuming institution at 1-913-321-7200.
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VI. Loan Customers

If you had a loan with Douglass National Bank, you should continue to make your payments as usual. The terms of your loan will not change under the terms of the loan contract because they are contractually agreed to your promissory note with the failed institution. Checks should be made to your former bank and sent to the same address until further notice.
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VII. Possible Claims Against the Failed Institution

Claims against failed financial institutions occur when bills sent to the institution remain unpaid at the time of failure. Shortly after the failure, the FDIC sends notices directly to all known service providers to explain the claim filing process.

Please note: there are time limits for filing a claim, as specified in the notice.

If you provided a service for Douglass National Bank and have not received a notice, please contact:

Federal Deposit Insurance Corporation
Receiver: Douglass National Bank
Attention: Claims Department, DRR
1601 Bryan Street
Dallas, Texas 75201

Or:
Call toll free 1-888-206-4662
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VIII. Priority of Claims

In accordance with Federal law, allowed claims will be paid, after administrative expenses, in the following order of priority:

1. Depositors
2. General Unsecured Creditors
3. Subordinated Debt
4. Stockholders

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IX. Dividend Information
No dividends have been paid at this time.

http://www.fdic.gov/bank/individual/failed/Douglas.html