Community National Bank, Lino Lakes, MN, Closed By Regulators

December 17, 2010 – Community National Bank, Lino Lakes, Minnesota, was closed today by The Office of the Comptroller of the Currency.   The FDIC was appointed as receiver and sold the failed bank to Farmers & Merchants Savings Bank, Manchester, Iowa, which will assume all deposits of Community National.

The two branches of Community National will reopen on the weekend as branches of Farmers & Merchants with no interruption in FDIC deposit insurance coverage.

Community National was a very small independent community bank with only $31.6 million in assets and $28.8 million in deposits, but at the heart of a troubled $1.3 billion dollar development default and scandal as reported by the Twin Cities Press.

Community National was the lead bank in a $35 million loan development deal involving 20 banks that would fund Ramsey Town Center, which was envisioned as a $1.3 billion mixed-use development but ran into trouble when the developer defaulted. The development has since been renamed COR, for City of Ramsey, and plans adjusted.

Three of the bank’s former top officers were indicted on dozens of federal fraud charges in connection with the deal. William Sandison, the bank’s former president, his son Ross Sandison, also a top officer, ended up pleading guilty to one count of conspiracy last year. Curtis Martinson, another top officer, also pleaded guilty in the case.

Farmers & Merchants agreed to purchase all of the assets without the benefit of a loss-share agreement with the FDIC but did not pay a premium for the deposits.

Farmers & Merchants has a long history, being established in 1925, and still operated as a locally owned bank with over $256 million in assets and a strong capital position, as described by the Bank.

Our quality growth has continued at F & M through the last year.  While we avoided many of the problems that other banks encountered, we also had our assets grow 11.5% with deposit growth of 12.5% and loan growth of 9.25%.  Most impressive was our capital growth…our equity capital and loan loss reserve grew over 18% through 2009 to in excess of $26 million.  Earnings for 2009 eclipsed $3.1 million, down from our 2008 earnings, but very competitive for a bank our size.

The failure of Community National will cost the FDIC Deposit Insurance Fund an estimated $3.7 million.   Community National is the 157th banking failure this year and the 8th in Minnesota.


  1. The economy will if we don’t create a mechanism to bring wealth based money into circulation Check out “The Minnesota Recovery Act” that will be moving forward in the legislature in the months ahead. A snapshot is below:

    “The Minnesota Recovery Act”
    • Balanced budget
    • Protected environment
    • Create Thousands of jobs & Incomes
    • Cut fuel, axle, and registration taxes in half
    • Build and maintain safe, state-of-the-art roads and bridges

    1. FACT – Banks do not lend depositor’s money. They create new electronic digit money for loans.


    3. The “modification” will require state-chartered banks to create debt-free money for the construction and maintenance of all public roads and bridges.

    4. Today, when state-chartered banks make loans they simply create the money as electronic bookkeeping entries. The money is just numbers in their computers. When you write a check or use your ATM card you put those numbers (money) into circulation and the money can then move freely through the economy.

    5. Banks will create money for roads and bridges by making electronic bookkeeping entries in their computers, just like they do now when they make loans. Except THIS IS NOT A LOAN but a final debt-free payment for approved production and does not have to be paid back to anyone.

    6. Half of the fuel, axle and registration taxes will be eliminated and half will be used to balance the state budget and reduce some property taxes.

    7. Individuals and businesses will save billions of dollars.

    8. “The Minnesota Recovery Act” creates demand for products, services and thousands of high-paying jobs. It provides desperately needed incomes, the cash flow Minnesota’s stagnant economy badly needs, and safe, state-of-the-art roads and bridges, and sustainable prosperity.

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