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Belly Up: The Collapse of the Penn Square Bank
No economist could have predicted that the Penn Square Bank, a small, obscure lender in an Oklahoma shopping mall, would become the instigator of a financial charade that would see billions of dollars in loans made on the basis of imaginary oil and natural gas reserves—just as a worldwide oil glut and the repeal of regulatory gas laws were about to pull the rug from under the Oklahoma energy boom.
Belly Up tells this amazing true story with brilliant reporting, delicious detail, and an unbelievable yet all-too-real cast of characters, from the young geologist who convinced banks to invest lots of money in a huge new source of natural gas to the banker who became notorious for lending money to every con artist and wildcatter with a lease, a rig, and a dream.
Praise for Belly Up
“ Belly Up merits a slot on any investor’s literary shelf as surely as it does a Pulitzer Prize!” — Financial World
“Investigative reporting at its best.” — The Baltimore Sun
Belly Up tells this amazing true story with brilliant reporting, delicious detail, and an unbelievable yet all-too-real cast of characters, from the young geologist who convinced banks to invest lots of money in a huge new source of natural gas to the banker who became notorious for lending money to every con artist and wildcatter with a lease, a rig, and a dream.
Praise for Belly Up
“ Belly Up merits a slot on any investor’s literary shelf as surely as it does a Pulitzer Prize!” — Financial World
“Investigative reporting at its best.” — The Baltimore Sun
520 pages, Paperback
First published December 9, 1985
45 people are currently reading
204 people want to read
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Displaying 1 - 16 of 16 reviews
October 15, 2022
Incredible documentary account of horrible banking. Patterson who eventually served time in Federal prison after this book was written would have customers sign up to 14 blank loan forms and then advance funds to cover overdrafts and renew notes with no interest or principal reduction made. The loan clerk could not spell so she made entries to incorrect loans when payments were made!
Patterson did parties that would rival Bacchus the Roman God of Wine. Patterson would drink Amaretto and soda out of his Gucci loafers.
A fascinating example of greed and corruption.
Patterson did parties that would rival Bacchus the Roman God of Wine. Patterson would drink Amaretto and soda out of his Gucci loafers.
A fascinating example of greed and corruption.
August 7, 2013
An excellent description of cash and black gold run amok, and why times were high in Oklahoma in the 70s and early 80s, and why the whole thing crashed. Some of the characters can be a little hard to keep track of, but the author does a great job of making complex concepts simple.
June 7, 2017
This book seems well researched and has gained much rapport over time however it isn't terribly well written. The many characters get jumbled up easily and the story does not flow at all.
February 20, 2025
Likes -
* Fascinating story about a small bank in Oklahoma got swept up in the oil and gas craze of the late 70s / early80s and ultimately failed.
* Loved the handful of pictures included in the book; wish there had been more and had included some of the other main characters.
* How this bank operated was WILD - they were making loans so fast that borrowers would sign a bunch of blank notes that would later be filled in. On at least one occasion, they LOST fourteen of them for one borrower. Found them a few days later but OMG.
* Penn Square was selling ~$2B of (not great) loans to Chase, Continental, and Seattle First which resulted in the bank's assets growing from $62M in 1977 to $520MM in 1982. After a tense few days, the regulators decided to let the bank fail and did not bail out uninsured depositors.
* One deal the bank did (a marina condominium, LOL) was described by a local newspaper as having a track record about as successful as selling autographed copies of "Mein Kempf" in downtown Tel Aviv.
* Kickbacks and bribes abounded on the oil field, including instances of landmen receiving a can of pralines as a gift with cocaine buried in the bottom. As the oil and gas industry heated up in Oklahoma so did drug use, number of reported STIs, and the divorce rate.
* A secretary was promoted but had trouble with decimal points which led to a lot of errors (!!).
* Bill Patterson was a character - showing up naked at a party save for a Viking helmet, starting food fights at fancy dinners, and drinking booze out of his Gucci loafer.
* At one time, Penn Square was giving away a Rolls Royce in lieu of interest on $1MM CDs as a way to circumvent banking rules against paying interest on noninterest bearing demand deposits.
* The failure of Penn Square is attributed to the failure of other banks in the early 80s including United American at the hands of Jake Butcher in Knoxville, TN.
Dislikes -
* Books like this remind me why editors are important. There are a LOT of characters to keep straight. The author sometimes refers to them by nicknames, sometimes by just their last name, and sometimes by their first name. Take William Jennings. He was referred to as William, Bill, Beep, and Jennings throughout the book without much consistency.
* I wanted an Epilogue! What happened to all these people after the bank failed? There was a brief mention of civil charges against Bill Patterson that were dropped, but the internet tells me he was eventually incarcerated.
* Beginning was a bit dry as the author laid the groundwork for the reader on the oil and gas industry
* The story could have been told in a more linear fashion; there was a lot of jumping around and going back throughout
* Fascinating story about a small bank in Oklahoma got swept up in the oil and gas craze of the late 70s / early80s and ultimately failed.
* Loved the handful of pictures included in the book; wish there had been more and had included some of the other main characters.
* How this bank operated was WILD - they were making loans so fast that borrowers would sign a bunch of blank notes that would later be filled in. On at least one occasion, they LOST fourteen of them for one borrower. Found them a few days later but OMG.
* Penn Square was selling ~$2B of (not great) loans to Chase, Continental, and Seattle First which resulted in the bank's assets growing from $62M in 1977 to $520MM in 1982. After a tense few days, the regulators decided to let the bank fail and did not bail out uninsured depositors.
* One deal the bank did (a marina condominium, LOL) was described by a local newspaper as having a track record about as successful as selling autographed copies of "Mein Kempf" in downtown Tel Aviv.
* Kickbacks and bribes abounded on the oil field, including instances of landmen receiving a can of pralines as a gift with cocaine buried in the bottom. As the oil and gas industry heated up in Oklahoma so did drug use, number of reported STIs, and the divorce rate.
* A secretary was promoted but had trouble with decimal points which led to a lot of errors (!!).
* Bill Patterson was a character - showing up naked at a party save for a Viking helmet, starting food fights at fancy dinners, and drinking booze out of his Gucci loafer.
* At one time, Penn Square was giving away a Rolls Royce in lieu of interest on $1MM CDs as a way to circumvent banking rules against paying interest on noninterest bearing demand deposits.
* The failure of Penn Square is attributed to the failure of other banks in the early 80s including United American at the hands of Jake Butcher in Knoxville, TN.
Dislikes -
* Books like this remind me why editors are important. There are a LOT of characters to keep straight. The author sometimes refers to them by nicknames, sometimes by just their last name, and sometimes by their first name. Take William Jennings. He was referred to as William, Bill, Beep, and Jennings throughout the book without much consistency.
* I wanted an Epilogue! What happened to all these people after the bank failed? There was a brief mention of civil charges against Bill Patterson that were dropped, but the internet tells me he was eventually incarcerated.
* Beginning was a bit dry as the author laid the groundwork for the reader on the oil and gas industry
* The story could have been told in a more linear fashion; there was a lot of jumping around and going back throughout
July 8, 2022
I was an auditor of many of the oil companies that were victim of Penn Square Bank. I personally knew Bill Patterson and Bill Jennings. They were perhaps the most polished nice guys you ever met, who would steal your wallet if you left it on the table.
Sirs,
I have read this book 3 times in the last 40 or so years.
When have you ever known a large mid-west city's banks to be used as instruments of greed, which up promoted liability bundles to bigger and bigger banks all at the hands of the owners of a city's main industry company owners?
I was not surprised Arthur Andersen & Co. was dismantled. Their partners should have gone to jail for the bribes they took in Oklahoma City oil audits. They had about 12k professional staff when I worked for them early in in my career. They took bribes to fix audits including Kerr McGee. A partner I knew was laughed about by oil circles for how little it took to bribe him. It was routine that big 8 audit firms in the 80s to take payola to falsify financial statements.
If a company had, example only, 100k in assets and 300k in liability, and 1k in equity, obviously something is whacko. And I used to laugh when someone told me of that sort of disproportionately out of balance set of books, and I would whisper Penn Square? And they would nod, and we both laughed; however, it wasn't funny to anyone invested in it.
This book gives a fun and interesting historical account of Bill Jennings and Bill Paterson's career at Penn Square bank. The company's sizes that I audited started at a miniscule size of 25 million small of 100 million and medium of 800 million. Ultimately, I tried to produce truthful financial statements, and I wound up being fired for an out of balance nonprofit's books, out of balance by one cent. They couldn't have someone onboard that didn't play ball of course. And they hated how I refused to sign the corner of some of my oil and gas audit clients. I might have had an oil company that I signed affirmed to, but I can't seem to remember one.
It's a hilarious story in hindsight, hell it was funny when it was going on
It is a great read; I have read it 3 times over the last 40 years and consider it a truthful testimony of events of that era. To my knowledge. Hey Mr., big shots, I might consider signing those financial statements for the right price nowadays.
Endorsed by,
Henry McCluskey
Read three times over the years.
Sirs,
I have read this book 3 times in the last 40 or so years.
When have you ever known a large mid-west city's banks to be used as instruments of greed, which up promoted liability bundles to bigger and bigger banks all at the hands of the owners of a city's main industry company owners?
I was not surprised Arthur Andersen & Co. was dismantled. Their partners should have gone to jail for the bribes they took in Oklahoma City oil audits. They had about 12k professional staff when I worked for them early in in my career. They took bribes to fix audits including Kerr McGee. A partner I knew was laughed about by oil circles for how little it took to bribe him. It was routine that big 8 audit firms in the 80s to take payola to falsify financial statements.
If a company had, example only, 100k in assets and 300k in liability, and 1k in equity, obviously something is whacko. And I used to laugh when someone told me of that sort of disproportionately out of balance set of books, and I would whisper Penn Square? And they would nod, and we both laughed; however, it wasn't funny to anyone invested in it.
This book gives a fun and interesting historical account of Bill Jennings and Bill Paterson's career at Penn Square bank. The company's sizes that I audited started at a miniscule size of 25 million small of 100 million and medium of 800 million. Ultimately, I tried to produce truthful financial statements, and I wound up being fired for an out of balance nonprofit's books, out of balance by one cent. They couldn't have someone onboard that didn't play ball of course. And they hated how I refused to sign the corner of some of my oil and gas audit clients. I might have had an oil company that I signed affirmed to, but I can't seem to remember one.
It's a hilarious story in hindsight, hell it was funny when it was going on
It is a great read; I have read it 3 times over the last 40 years and consider it a truthful testimony of events of that era. To my knowledge. Hey Mr., big shots, I might consider signing those financial statements for the right price nowadays.
Endorsed by,
Henry McCluskey
Read three times over the years.
March 17, 2021
Good book- a little long and very detailed. Sometimes hard to follow all the characters. Good story and plenty of info on who, what, and how of the failure. Would recommend.
May 17, 2025
I was in over my head with this one but I appreciate the challenge.
Bankers are evil. Everyone in and around that business is suspect.
Bankers are evil. Everyone in and around that business is suspect.
February 2, 2017
A very good synopsis of the excesses of the Oklahoma boom/bust of the early 80's. I think you would like this if 1) you are an okie or 2) interested in reading about arrogant bankers drinking amaretto & soda out of their lizard skin ropers making million dollar loans on cocktail napkins. Yeah, it was pretty bad back then. Good thing we don't have to worry about repeating the same mistakes of utterly groundless, yet infinite optimism in any of our economic entities today. That was sarcasm......
As a layman, I thought Zweig had just enough stories to keep me going, but just enough detail re. the deal-making structure to inform me. No doubt, some readers will be bored by the descriptions of the financial instrumentation employed by the Penn Square cronies et al. Others will be frustrated with the lack of treatment Zweig gives for the more technical and detailed descriptions of those same packages/contracts/cocktail napkins, etc. I guess that is the tension most authors face.
Finally: This was published in '86 & I know banking has changed since then. It helped me to keep that in mind, but I still learned some good lessons. Like you shouldn't loan an oil & gas man 120% of his estimated reserves.
As a layman, I thought Zweig had just enough stories to keep me going, but just enough detail re. the deal-making structure to inform me. No doubt, some readers will be bored by the descriptions of the financial instrumentation employed by the Penn Square cronies et al. Others will be frustrated with the lack of treatment Zweig gives for the more technical and detailed descriptions of those same packages/contracts/cocktail napkins, etc. I guess that is the tension most authors face.
Finally: This was published in '86 & I know banking has changed since then. It helped me to keep that in mind, but I still learned some good lessons. Like you shouldn't loan an oil & gas man 120% of his estimated reserves.
September 5, 2013
Fascinating book detailing the oil/gas bubble of the 1970s and early 1980s and the failure of Penn Square Bank. Zweig lays out lots of information about lending practices and euphoric markets that are take-aways we can apply to the current RE crisis.
I recommend this book to anyone interested in banking, markets, and politics.
I will caution readers that while it has a lot of good information, it was published in 1986 and that our banking regulatory framework was dramatically reworked in the early 1990s (in part as a result of this collapse).
I still think it's an excellent primer on mistakes banks and investors can make in lending and the short comings of regulatory oversight of the banking industry.
I recommend this book to anyone interested in banking, markets, and politics.
I will caution readers that while it has a lot of good information, it was published in 1986 and that our banking regulatory framework was dramatically reworked in the early 1990s (in part as a result of this collapse).
I still think it's an excellent primer on mistakes banks and investors can make in lending and the short comings of regulatory oversight of the banking industry.
May 3, 2012
In 1982, Penn Square Bank, a bank located in a strip mall in Oklahoma, failed. This book chronicles how the small bank's major wheeling and dealing in oil and gas investments led to one of the biggest crises in the history of American banking. The book is perhaps even more interesting now as it parallels and perhaps foreshadows some of the issues of the more recent financial crisis.
November 14, 2016
Boy was this book awesome. Think subprime crisis meets oil wells. Great story where I found my jaw dropping at times saying WTF? Sadly, if reinforced something I've known: Some people get rich simply by borrowing money and never paying it back. For some in this book, it was in the tens and hundreds of millions and it was in the mid 80s!
This entire review has been hidden because of spoilers.
July 13, 2016
Solid reporting, made it clear and straightforward to follow what had happened throughout the number of banks involved. Occasionally I got lost in the mass of names of people I was meant to remember... Not as catchy as Galbraith or Michael Lewis, but interesting nonetheless!
November 8, 2008
Guess we never learn.
February 2, 2011
Awesome. Must read! Especially if you live in Oklahoma City....or are interested in the 80s or the oil business...or stupid bankers...heck, just read it.
January 10, 2016
A must read for anyone interested in the excess and greed of the Oklahoma Oilies of the early 80's.
April 20, 2016
It is a classic business narrative of the 1980s, exceptionally well done, about how an asset-price bubble develops and results in a bust and financial crisis.
Displaying 1 - 16 of 16 reviews