Commissioner G. Edward Leary announced late Friday that he took possession of Barnes Banking Company, Kaysville, Utah, a state-chartered bank that is a member of the Federal Reserve System, and immediately appointed the Federal Deposit Insurance Corporation
(“FDIC”) as receiver.
To protect the depositors, the FDIC created the Deposit Insurance National Bank of Kaysville (DINB). DINB will remain open for approximately 30 days to allow depositors access to their insured deposits and time to open accounts at other insured institutions.
The Commissioner took possession of Barnes Banking Company in order to protect depositors and the public, finding, among other things, that Barnes Banking Company was insolvent and not in a safe and sound condition to transact business. The Department of Financial Institutions, as well as the Federal Reserve Bank of San Francisco, have been closely monitoring Barnes Banking Company and had ordered it to increase its capital to a safe and sound level. Efforts by Barnes Banking Company to raise capital to an acceptable level were unsuccessful.
DINB will open Barnes Banking Company’s ten offices on Saturday, January 16, 2010 from 9:00 a.m. to 1:00 p.m. Branch offices not normally open on Saturdays will be open January 16, for customers who want access to their insured deposits. DINB will maintain normal Barnes Banking Company business hours thereafter.
Banking activities, such as direct deposits, writing checks, ATM withdrawals, and debit card transactions, will continue normally under DINB during a 30-day transition period. Depositors of Barnes Banking Company are encouraged to transfer their insured funds to another depository institution during the transitional period. They may do so by asking their new depository institution to electronically transfer their deposits from the DINB or by writing checks for the amount in their accounts. For depositors who have not closed or transferred their accounts by the end of the 30-day period, the FDIC will mail checks to the address of record for the amount of the insured funds. Barnes Banking Company official checks will continue to clear and will be issued to customers closing accounts.
Barnes Banking Company was chartered in 1891 with its headquarters located at 33 South Main Street, Kaysville, Utah. The Bank also has branches in Bountiful, Fort Union, Layton, Orem, Roy, Salt Lake City, South Ogden, St. George and Syracuse, Utah. As of September 30, 2009, Barnes Banking Company total assets of approximately $828 million and total deposits of approximately $787 million.
Barnes Banking Company is the first failure in Utah since May 1, 2009, when the $299 million in total assets America West Bank in Layton was closed.
The Utah Department of Financial Institutions is the regulator for all state-chartered banks, industrial banks and credit unions. The Department also regulates trust companies, independent escrow companies, check cashers, deferred deposit lenders (payday), title lenders, consumer lenders, as well as first mortgage loan servicers, and third-party payment providers (money orders, travelers checks, wire transfers).
----Information from THE UTAH DEPARTMENT OF FINANCIAL INSTITUTIONS.
Zions Bank statement on FDIC assistance with resolution of Barnes Bank
Under the terms of an agreement with the DINB and FDIC, Zions Bank will provide operational management of the DINB. All 10 former branches of Barnes Bank will open on Saturday, January 16, 2010 at 9 a.m. as branches of the DINB of Kaysville for an interim transition period, after which the new bank will be closed. Direct deposit, checks, ATMs and debit cards will work normally for former customers of Barnes Bank during the transition period.
Zions Bank has also received approval from the Office of the Comptroller of the Currency to operate temporary branches inside the 10 former Barnes Bank locations, allowing Zions Bank to accept funds from former customers of Barnes Bank and assist them in opening deposit accounts with Zions Bank.
“We’re really here to help. Barnes Bank has a legacy of providing quality service to families and businesses in the community since 1891, so we want to help their former clients through this transition,” said Scott Anderson, president and CEO of Zions Bank. “This is an extremely difficult situation for everyone, but we are prepared to answer questions, provide support and comfort, and assist former Barnes Bank clients into new banking relationships.”
“We are honored to be asked to assist the FDIC with their efforts and continue to support our fellow Utahns through challenging times,” added Anderson. “Our goal is to ensure that former Barnes Bank clients have as smooth a transition as possible during such a stressful time.”
----Information from: Zions Bank