Penn Square Bank

Penn Square Bank was a small commercial bank located in the rear of the Penn Square Mall in Oklahoma City. The bank made its name in high-risk energy loans during the late 1970s and early 1980s Oklahoma and Texas oil boom. Between 1974 and 1982, the bank's assets increased more than 15 times to $525 million and its deposits swelled from $29 million to more than $450 million. As a result primarily of irresponsible lending practices in connection with the sale of over $1 billion in "loan participations" to other banks throughout America, Penn Square Bank failed in July 1982.

The bank is often cited as being partly responsible for the collapse of Continental Illinois National Bank and Trust Company of Chicago, which had to write-off some US$500+ million in loans purchased from Penn Square, and major losses at other banks in Seattle, Michigan and New York, among others. The bank's collapse coincided with the 1980s oil glut and Penn Square was the first of 139 Oklahoma banks that failed in the 1980s. The insolvency was the subject of two best-selling books and led to a prison term for the bank's energy-lending chief, Bill Patterson.

Abilene National Bank in Abilene Texas did correspondent banking with Penn Square Bank. Abilene National Bank later became Mbank then Bank One then JPMorgan Chase bank.

Penn Square Alumni

• Bill P. (Beep) Jennings (b. 1923, d. 2003)
• William G. "Bill" Patterson

See also

• List of notable business failures

External links

• FDIC history of the Penn Square Bank failure
• New York Times Article - 'MICKEY MOUSE IN OKLAHOMA'
• Belly Up: The Collapse of the Penn Square Bank, book by Phillip L. Zweig
• Funny Money, book by Mark Singer