County bank closed by FDIC, state banking commission


By Kelly Rupp and Traci Chapman

Bank of Union customers and vendors were surprised last Friday afternoon, when the Oklahoma Banking Commission closed the 113-year-old bank.

Bank of Union had full-service locations in El Reno and Union City, as well as a loan and commercial lending center in Oklahoma City. The three locations were reopened Saturday as BancFirst. Investigators with the FDIC were on-site Friday reviewing records and speaking with bank employees, officials said. FDIC was named receiver of Bank of Union’s assets and liabilities at the time it was closed, at 3 p.m. Jan. 24.

For Bank of Union customers, accounts would be transferred to BancFirst, although they would be able to use their current checks and debit cards, as well as online banking features and ATMs, said Jay Hannah, BancFirst executive vice president. Anyone with a loan at Bank of Union should continue to make their regular payments as scheduled. Loan terms would not change because Bank of Union entered into contracts with those customers. Customers should contact their regular loan officer with any questions they might have, he said.

“I can tell you that we will operate the bank with normal hours, full service, and with the same friendly faces that customers know. We are very happy to be a member of the Union City and El Reno communities,” Hannah said.

Although accounts have been automatically transferred to BancFirst, customers may withdraw their funds from any transferred account without an early withdrawal penalty until they enter into a new deposit agreement with BancFirst as long as the deposits are not pledged as collateral for loans

Bank of Union was chartered on Nov. 13, 1900. Originally located in Union City when it was still a part of Oklahoma Territory, the bank eventually grew to include the El Reno and Oklahoma City locations.

Questions about the bank first became public in June 2013, when Bank of Union was placed under a consent order by FDIC and Oklahoma State Banking Department. In August, the bank entered into an agreement with the Federal Reserve Bank in Kansas City, Mo., which required it to comply with specific conditions to improve its financial stability. Officials at that time said the bank had approved several loans without proper collateral. As of Sept. 30, 2013, the bank reported it had about $331.4 million in total assets and $328.8 million in total deposits. BancFirst assumed all of the failed bank’s deposits and agreed to purchase about $225.5 million of its assets, said Greg Hernandez, FDIC spokesman.

Bank of Union had an asset ratio of 166 percent last March, according to the FDIC. An asset ratio over 100 percent can be an indication that a bank is under stress and struggling with delinquent loans, officials said. At that time, bank president John Shelley said Bank of Union had undergone a period of rapid growth in assets over the past five years, thanks in part to the booming energy sector and agricultural activity in Canadian County. Because of the economic growth, the bank had grown from $190 million in assets five years ago to $400 million, Shelley said.

Bank of Union is the second FDIC-insured bank in the country to fail this year, Hernandez said.

“The last FDIC-insured institution closed in Oklahoma was First Capital Bank in Kingfisher, which closed on June 8, 2012,” he said.

Bank of Union employees were serving the public as usual on Monday under the BancFirst mantle. Sixty-three people were employed by the bank, 50 of them at the El Reno branch. The status of Michael Braun, who was just recently named interim president and CEO of Bank of Union, was unknown. Braun was given the post after Shelley retired in December.

“Our goal is to recapitalize the bank,” Braun said recently. “You hate to lose a community bank,” he said, referring to numerous city, community and school projects The Bank of Union has helped fund through the years. 

Customers who have questions about the transaction can call the FDIC toll free at 800-405-8251. Information is also available online at

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