The Office of the Comptroller of the Currency closed the Kentland Federal Savings and Loan Association of Kentland, Ind.
The OCC appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. The FDIC then entered into an agreement with Kentland Bank, which has no affiliation with Kentland Federal Savings and Loan Association, to purchase substantially all assets and assume all deposits of Kentland Federal Savings and Loan Association.
Kentland Federal Savings and Loan Association had total assets of $3.73 million and total deposits of $3.65 million as of March 31. It was the smallest standalone bank in the United States.
The OCC acted after finding that the bank had experienced substantial dissipation of assets and earnings due to unsafe and unsound practices. The OCC also found that the bank incurred losses that depleted its capital, leaving the bank critically undercapitalized. It determined that there is no reasonable prospect that the bank will become adequately capitalized.
The sole branch of Kentland Federal Savings and Loan Association will permanently close. Depositors of Kentland Federal Savings and Loan Association will automatically become depositors of Kentland Bank. The deposits assumed by Kentland Bank will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship. T
Customers of Kentland Federal Savings and Loan Association will have immediate access to their deposits at all branches of Kentland Bank during normal business hours.
The failure will cost the Deposit Insurance Fund approximately $1.2 million, according to the FDIC.