NR 2000-101
FOR IMMEDIATE RELEASE				
Media Contacts:
OCC:  Dean DeBuck (202) 874-5770
FDIC:  David Barr (202) 898-6992
December 14, 2000				       		



FDIC Approves the Assumption of the Insured Deposits of
The National State Bank, Metropolis, Illinois

WASHINGTON, D.C. -- The National State Bank, Metropolis, 
Illinois, was closed by the Office of the Comptroller of the 
Currency (OCC) at 1 p.m. (EST) today and the Federal Deposit 
Insurance Corporation (FDIC) was appointed receiver.  The FDIC 
entered into an agreement to have Banterra Bank, Marion, 
Illinois, assume the insured deposits of the failed bank.

The former office of National State Bank will reopen on Friday, 
December 15, 2000, as a branch of Banterra Bank.  The failed bank 
received a national bank charter on February 8, 1900, from the 
OCC.  As of September 30, 2000, it had total assets of 
approximately $91.7 million and total deposits of about $71 
million.

The OCC used its authority under the FDIC Improvement Act of 1991 
(FDICIA) to close the bank when it found that the bank was 
critically undercapitalized -- that is, it had less than 2 
percent tangible equity capital.  Inadequate control of the 
credit and transaction risks associated with its merchant 
processing activities involving the settlement of credit card 
sales transactions for merchants and inadequate supervision by 
the Board of Directors resulted in a high volume of losses.  
These losses and subsequent provisions to absorb additional 
losses depleted capital and threatened the bank's liquidity.  In 
light of these findings, the OCC determined that closure and the 
appointment of the FDIC as receiver were necessary to protect the 
interests of the bank's insured depositors.

As part of the agreement entered into with the FDIC, Banterra 
Bank will pay the receiver a premium of $2,050,000 for the right 
to purchase $23.7 million of the failed bank’s assets and to 
assume the insured deposits.  It is estimated at the time of 
closing, National State Bank had insured deposits of 
approximately $67 million in about 9,680 accounts.  The FDIC as 
receiver will retain the remaining assets of $68 million for 
later disposition.  

The FDIC is in the process of valuing the assets of the failed 
bank and therefore is unable to estimate the loss to the Bank 
Insurance Fund (BIF) at this time.  National State Bank is the 
sixth BIF-insured failure this year and the seventh failure of an 
institution insured by the FDIC in 2000.

# # #
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 10,101 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.

FDIC press releases and other information are available on the Internet via 
the World Wide Web at www.fdic.gov and may also be obtained through the 
FDIC’s Public Information Center (800-276-6003 or 202-416-6940).
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The OCC charters, regulates and examines approximately 2,300 national banks 
and 56 federal branches of foreign banks in the U.S., accounting for more 
than 56 percent of the nation’s banking assets.  Its mission is to ensure a 
safe and sound and competitive national banking system that supports the 
citizens, communities and economy of the United States.