Three enforcement actions against Small Business Bank and its parent are no longer active, the Federal Reserve Board said, following the Lenexa lender’s July 17 closure.
An Oct. 16 notice lists the terminations as effective Oct. 13. The actions were a Sept. 1, 2023, cease-and-desist order against the bank and Gardner Bancshares, Inc.; a Nov. 13, 2024, order against the bank; and a June 29, 2026, prompt corrective action directive against the bank. The Fed did not explain the terminations, say whether the required steps had been completed or address the closure.
The 2023 order followed an examination that identified problems involving staffing, internal controls, credit risk and lending, capital, information security, liquidity and anti-money-laundering compliance. The 2024 order cited new and continuing deficiencies in risk management and anti-money-laundering compliance. Both cease-and-desist orders were issued upon consent.
In its June directive, the Fed said the bank had been significantly undercapitalized as of June 18. It gave the bank 30 days to raise enough equity to become adequately capitalized, sign a contract under which a depository institution holding company would acquire it, combine with another insured depository institution or take other necessary measures.
The Kansas Office of the State Bank Commissioner linked the closure to ongoing operating losses, saying they had left the bank critically undercapitalized under federal and state law. The office appointed the FDIC as receiver. The FDIC arranged for The Farmers State Bank of Oakley to take over nearly all deposits and buy selected assets. Kansas officials said depositors would automatically become depositors of the acquiring bank and that the Lenexa branch was scheduled to reopen July 20.
The FDIC said the bank held $73 million in assets and roughly $69 million in deposits at March 31, 2026. The FDIC preliminarily estimated the failure would cost the Deposit Insurance Fund about $5.7 million, subject to revision as it sells retained assets.
