July 23, 2010 – Community Security Bank – Banking Failure #101
See analysis of this week’s bank closings at – Banking Failures Hit 103 As Regulators Close Seven More Banks
FDIC – Community Security Bank, New Prague, Minnesota, was closed today by the Minnesota Department of Commerce, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Roundbank, Waseca, Minnesota, to assume all of the deposits of Community Security Bank.
The sole branch of Community Security Bank will reopen on Saturday as a branch of Roundbank. Depositors of Community Security Bank will automatically become depositors of Roundbank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage.
As of March 31, 2010, Community Security Bank had approximately $108.0 million in total assets and $99.7 million in total deposits. Roundbank will pay the FDIC a premium of 0.89 percent to assume all of the deposits of Community Security Bank. In addition to assuming all of the deposits of the failed bank, Roundbank agreed to purchase essentially all of the assets.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $18.6 million. Compared to other alternatives, Roundbank’s acquisition was the least costly resolution for the FDIC’s DIF. Community Security Bank is the 101st FDIC-insured institution to fail in the nation this year, and the seventh in Minnesota. The last FDIC-insured institution closed in the state was Pinehurst Bank, St. Paul, on May 21, 2010.