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March 2009 Report No. AUD-09-005 Material Loss Review of The Columbian Bank and Trust Company, Topeka, Kansas AUDIT REPORT Report No. AUD-09-005 March 2009 Material Loss Review of The Columbian Bank and Trust Company, Topeka, Kansas Federal Deposit Insurance Corporation Audit Results Why We Did The Audit Columbian failed primarily due to bank management’s pursuit of rapid asset growth concentrated in high-risk CRE/ADC loans, without adequate loan underwriting and credit administration practices. As required by section 38(k) of the Federal Resulting losses due to asset quality deterioration and a downturn in the economy severely eroded Deposit Insurance Act, the Office of capital, and in turn, the availability of wholesale funding sources used by the bank to fund its growth. Inspector General (OIG) conducted a As a result, the bank was unable to satisfy liquidity requirements, leading to its failure. Specifically: material loss review of the failure of The Columbian Bank and Trust Company Management. Columbian’s BOD did not ensure that bank management identified, measured, (Columbian), Topeka, Kansas. On monitored, and controlled the risk of the institution’s activities or implemented timely corrective actions August 22, 2008, the State of Kansas, Office in response to examiner recommendations. In particular, ...