Another Missouri Bank Fails

The Missouri Division of Finance and the FDIC on Friday announced the closing of Hume Bank, of Hume, Mo., with the FDIC being named receiver. All of the institution's insured deposits were taken over by Security Bank of Rich Hill, Mo.

This is the second bank failure this year. The first was Douglass National Bank, of Kansas City, in late January.

TheStreet.com had downgraded Hume Bank to a D rating (weak financial strength) in December 2007. We now know that our rating was based on false information, the extent of which was only recently discovered by bank examiners.

According to D. Eric McClure, the Missouri Commissioner of Finance, there was "some widespread mismanagement" at Hume Bank, by its former management, which was replaced last summer. Problem loans were under-reported and the bank was even creating false records to indicate that payments were received when they were never collected. ...