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First National Bank and Trust Company of Oklahoma City used a foreclosure on a reported $1 million loan to the holding company of Oklahoma National Bank to take control of the south Oklahoma City bank, the FDIC and a state banking official said.
The takeover was approved Monday by the FDIC and the comptroller of the currency. It may be subject to scrutiny for its propriety, according to Jim McKeown, executive manager of the Independent Bankers Association, although all laws were followed.
Oklahoma Bancshares Inc., the holding company for Oklahoma National, 2701 S Harvey, approved the foreclosure action along with First National, the state's largest bank.
McKeown said some reports have surfaced that a second loan request by the bank holding company to keep the bank afloat was denied by First National, and the $1 million loan subsequently foreclosed.
"Those actions may be up to some scrutiny from the media due to the decision made on that loan," McKeown said.
First National Bank officials could not be reached for comment Monday evening.
But, those officials said Sunday the comptroller's office had contacted them for assistance last week because of stability questions concerning Oklahoma National because of "troubled" loans. A banking source said Monday that many of the troubled loans were to the energy industry, with many coming in the past six to nine months.
McKeown said First National will have to divest itself of the bank, but that divestiture may not be required for six months or up to two years.
"There is a gray area concerning what divestiture is required. More research is required," he said late Monday.
First National immediately contributed $11.5 million in Capital to Oklahoma National, founded in 1929, and agreed to contribute additional Capital from time to time.
"You would find few people to argue that this was not the best course to take," said Max Cook, vice president for the Oklahoma Bankers Association.
The FDIC has agreed to cover Oklahoma National for any losses over the next 12 months up to $19.25 million.
By 1981 year-end figures, Oklahoma National had assets of about $134 million and deposits of about $121 million, with loans outstanding of $86 million. First National has assets of $2.8 billion.
According to FDIC officials, the comptroller of the currency notified them that Oklahoma National's financial condition had deteriorated and was in "imminent danger of failure."
A source within the Federal Reserve System said that the Fed had delivered some assistance in the recent weeks to Oklahoma National, but all loans were collateralized by twice the value of the loans.
Oklahoma National did not receive assistance Monday because there was not a run on the bank, the source said. Monday traditionally is a high-volume day at the bank due to the predominantly blue-collar clientele receiving checks on Friday.
Oklahoma National customers interviewed Monday morning expressed concern over their deposits, but few said they would withdraw their money.
"As far as I am concerned, the bank is solvent," said Darrell Piatt, a bank customer for two years. "I see nothing to get worried about."
First National will give the FDIC any interest that Oklahoma National has in any bond claims and "certain other potential legal actions related to Oklahoma National's difficulties." No such claims exist, the FDIC said. But officials with the agency said it would investigate to determine whether any such claims could provide a source for future recovery.
Oklahoma National's Board of Directors will be retained for 60 days.
After that, if First National wishes to keep the officials, then the FDIC will have to approve.
Archive ID: 87405