Tulsa's SpiritBank strikes agreement with regulators to cut size, boost capital

Tulsa bank agrees to get smaller to improve capital condition while dealing with losses and bad loans.
by Don Mecoy Published: May 25, 2012
Advertisement
;

Strapped with bad loans and losses, Tulsa-based SpiritBank has struck an agreement with state and federal regulators to cut the size of the bank more than 20 percent to improve its capital position.

SpiritBank board member Tom Kimball said the company would reduce the bank's size by $300 million to boost its capital position and increase the bank's provision for troubled assets. On March 31, SpiritBank controlled assets of $1.25 billion.

“We want a right-sized SpiritBank for today and for the future,” Kimball said in a statement. “We have supported our local communities and businesses for nearly 100 years, and these actions will ensure the strength and resiliency to continue for another 100.”

Kimball said such voluntary agreements with regulators are more routine during times of broader economic distress.

“They are there to redouble efforts around safety and soundness,” he said. “We want to be transparent with our stakeholders — customers, communities and employees — concerning the voluntary agreement, and the fact that a number of these changes have already been incorporated into the bank's operations.”

State Banking Commissioner Mick Thompson said the agreement takes effect on Friday.

“The bank is already taking corrective action on the agreement with the FDIC and the state Banking Department,” Thompson said.

Joyce Madewell, SpiritBank executive vice president of marketing, said the bank would sell some mortgage assets.

“We have the good fortune of having a large wholesale mortgage operation composed of loans (assets) that stay on our books for 30 days or so at a time,” Madewell said. “We are able to move portions of this as needed to other financial institutions for a period of time that allows us the capital room to rid ourselves of problem assets.”

Under the agreement, the bank is seeking to boost its capital ratio to 8.5 percent from the current 8.43 percent, she said. The capital ratio is the percentage of a bank's capital to its risk-weighted assets, which can be increased by selling some of those assets.


by Don Mecoy
Business Editor
Business Editor Don Mecoy has covered business news for more than a decade after earlier working on The Oklahoman's city, state and metro news desks, including a stint as city editor. He has won state and regional journalism awards for business,...
+ show more


Trending Now


AROUND THE WEB

  1. 1
    Sex Valley: Tech's booming prostitution trade
  2. 2
    Colorado Is Consuming Way More Pot Than Anyone Ever Believed
  3. 3
    What Dan Gilbert said to LeBron James to get him to return to Cleveland
  4. 4
    Female Yahoo Exec Sued By a Female Employee for Sexual Harassment
  5. 5
    A company wants you to experiment on Facebook — by quitting
+ show more