1st Regents Bank, Andover, MN, was closed today by the FDIC and state regulators. In its role as receiver, the FDIC sold the failed bank to First Minnesota Bank, Minnetonka, MN, which will assume all deposits of 1st Regents.
Established in May 2001, 1st Regents was a small bank with only $50.2 million in total assets. In March 2010, 1st Regents signed a Consent Order with regulators, and was ordered to raise additional capital and improve financial and managerial operations. Unable to raise additional capital, regulators had no choice but to close 1st Regents which was overwhelmed with defaulted loans. At September 30, 2012, 1st Regents had a total of $8.1 million (16% of total assets) categorized as loans past due 90 days or more, non-accruing loans and real estate owned.
All depositors of 1st Regents will automatically become depositors of First Minnesota Bank with continuing FDIC insurance coverage up to the applicable limits. Over the weekend, depositors of 1st Regents will have access to their money through the use of checking, ATMs and debit cards. The sole branch of 1st Regents will reopen on Tuesday at its usual time.
At September 30, 2012, 1st Regents had total assets of $50.2 million and total deposits of $49.1 million. First Minnesota agreed to purchase all of the assets of 1st Regents as well as assume all of the deposits for which it will pay the FDIC a premium of 2%.
The estimated loss to the FDIC Deposit Insurance Fund for the failure of 1st Regents Bank is $10.5 million. 1st Regents Bank is the second bank failure of 2013 and the first in Minnesota since September 2012.