One Tiny Bank Fails in Minnesota – Total Failures Reach 16 In 2010
Regulators closed one bank today in Minnesota. The failed bank had total assets of $18.2 million and total deposits of $16.3 million. The cost to the FDIC Deposit Insurance Fund for the closing of this tiny failed bank is estimated at $3.1 million. The cost to the FDIC Deposit Insurance Fund (DIF) for the 16 banking failures to date in 2010 now totals $3.23 billion.
1st American State Bank of Minnesota, Hancock, MN – Number 16
The FDIC, as receiver, entered into a purchase and assumption agreement with Community Development Bank, FSB, Ogema, MN, to acquire the assets and deposits of 1st American. As has been the case with almost all recent banking failures, the acquiring bank entered into a loss-share transaction with the FDIC which will limit potential losses on the acquired loan portfolio of the failed bank.
1st American State Bank is the third banking failure in Minnesota this year and the 16th FDIC insured institution to fail in 2010.
The pace of bank failures in 2010 is almost double the number that were closed in 2009 at this point. Analysts are predicting that banking failures in 2010 will exceed last year’s total of 140 institutions as loan defaults continue to increase. As of September 30, 2009, the latest FDIC Quarterly Banking Profile revealed that there are 552 problem banks, the most since the fourth quarter of 1993 when there were 575 institutions on the list. The previous year’s number of Problem Banks, as of September 30, 2008, was 171.
Banking Links – February 6, 2010
Are Underwriting Guidelines Too Tough? – Regulators Urge Banks To Expand Lending – WSJ
Looming FHA Bailout As Reserve Fund Reported Nearly Depleted – National Mortgage News