[Renfrew]

Getting regulator approval to start a bank is hard, but once you are chartered banks are allowed to do many things other corporations cannot.

It makes sense for a firm like FTX to buy a small one and make use of those permissions.

[DoodleBob]

I found some data on this bank. At the end of 2020, the bank had $14MM of assets (of which only about $4MM were loans) and $6MM of equity. Thus it was well-capitalized though tiny.

In the quarter ending September 30, 2020, there was a $3MM equity injection, and what appears to be a $1.4MM additional injection in the fourth quarter of 2020. Hmmm...

Here's where it gets interesting. The bank, which had posted net income routinely with small quarterly losses over the years, started cranking out quarterly losses of $22k, $44k, then losses shot up to $558k, $576k, $1,085k, and finally a whopping $2.6MM loss in the most recent quarter. Meanwhile, there are equity injections commingled with the losses.

Yes, there are thousands of banks in the US. The Fed is worried about Chase and Citigroup, not this rural agriculture bank.

That's said, the regulators HAD to see what was happening, AND allowed it.