Hillcrest Bank, Overland Park, Kansas, was closed today by the Kansas Office of the State Bank Commissioner, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Hillcrest Bank, National Association, Overland Park, Kansas, a newly-chartered bank subsidiary of NBH Holdings Corp., Boston, Massachusetts, to assume all of the deposits of Hillcrest Bank.
The 41 branches of Hillcrest Bank will reopen during normal business hours beginning Saturday as branches of Hillcrest Bank, N.A. Depositors of Hillcrest Bank will automatically become depositors of Hillcrest Bank, N.A. 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 the applicable limits. Customers of Hillcrest Bank should continue to use their existing branch until they receive notice from Hillcrest Bank, N.A. that it has completed systems changes to allow other Hillcrest Bank, N.A. branches to process their accounts as well.
This evening and over the weekend, depositors of Hillcrest Bank can 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, 2010, Hillcrest Bank had approximately $1.65 billion in total assets and $1.54 billion in total deposits. Hillcrest Bank, N.A. did not pay the FDIC a premium for the deposits of Hillcrest Bank. In addition to assuming all of the deposits of the failed bank, Hillcrest Bank, N.A. agreed to purchase essentially all of the assets.
The FDIC and Hillcrest Bank, N.A. entered into a loss-share transaction on $1.15 billion of Hillcrest Bank's assets. Hillcrest Bank, N.A. will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html.
Customers who have questions about today's transaction can call the FDIC toll-free at 1-800-591-2767. The phone number will be operational this evening until 9:00 p.m., Central Daylight Time (CDT); on Saturday from 9:00 a.m. to 6:00 p.m., CDT; on Sunday from noon to 6:00 p.m., CDT; and thereafter from 8:00 a.m. to 8:00 p.m., CDT. Interested parties also can visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/hillcrest_ks.html.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $329.7 million. Compared to other alternatives, Hillcrest Bank, N.A.'s acquisition was the least costly resolution for the FDIC's DIF. Hillcrest Bank is the 138th FDIC-insured institution to fail in the nation this year, and the third in Kansas. The last FDIC-insured institution closed in the state was Security Savings Bank, F.S.B, on October 15, 2010.
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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 7,830 banks and savings associations and 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.
FDIC press releases and other information are available on the Internet at www.fdic.gov, by subscription electronically (go to www.fdic.gov/about/subscriptions/index.html) and may also be obtained through the FDIC's Public Information Center (877-275-3342 or 703-562-2200). PR-236-2010