Banking regulators in the states of Minnesota and Missouri stepped in over the weekend to shut down community-based lenders in each of their respective states. These latest two closings bring the number of insured institutions on the ""FDIC's failed-bank list"":http://www.fdic.gov/bank/individual/failed/banklist.html to 76 for the 2011 calendar year.
[IMAGE]""The RiverBank"":http://www.theriverbank.com/ in Wyoming, Minnesota, had been in operation for more than a century and weathered many economic storms over the years, but the latest real estate downturn proved to be too much for the local community fixture. Local media reports indicate the bank bet heavy on real estate lending, increasing its portfolio five-fold from 2005 to 2008.
[COLUMN_BREAK]But with the real estate crash, defaults began to mount. The ""Problem Bank List website"":http://problembanklist.com/the-riverbank-wyoming-minnesota-fails-after-years-0410/ says the RiverBank ended its run with a troubled asset ratio of 414 percent, which ""made a financial recovery impossible."" The Minnesota Department of Commerce seized control of the RiverBank late Friday and named the FDIC receiver.
The FDIC negotiated a deal with ""Central Bank"":http://www.centralbnk.com out of Stillwater, Minnesota, to assume all of the deposits of the RiverBank, take over its six branch locations, and purchase essentially all of its assets.
The RiverBank had approximately $379.3 million in deposits and $417.4 million in assets. The FDIC and Central Bank entered into a loss-share transaction on $339.3 million of the acquired assets. The Minnesota bank's closing is expected to cost the FDIC $71.4 million.
""Sun Security Bank"":http://www.sunsecuritybank.com/, in Ellington, Missouri, was also shut down by its state regulator. It operated 27 branches, with $290.4 million in total deposits and $355.9 million in assets.
Springfield, Missouri's ""Great Southern Bank"":http://www.GreatSouthernBank.com agreed to take over the failed institution. The FDIC and Great Southern Bank will share any future losses on $351.9 million of Sun Security Bank's assets. The closing will cost the FDIC an estimated $118.3 million.