Bad Management Sinks Bank

Douglass National Bank of Kansas City, Mo., has become the first failure of a U.S. bank or thrift in 2008.

The Office of the Comptroller of the Currency announced the closing of the $53 million institution late Friday, with the Federal Deposit Insurance Corp. appointed as receiver.

In its announcement, the OCC cited the Douglass National Bank's "unsafe and unsound practices" and stated that the bank's losses threatened to wipe out its capital. The institution was significantly undercapitalized per regulatory guidelines for the three quarters ended Sept. 30, 2007.

TheStreet.com Ratings had downgraded Douglass National Bank to an E- rating (very weak financial strength) in December 2006, because of repeated net losses, poor loan quality and the low level of capital. ...