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Minnesota Bank Shut Down by Regulators

It seems that every weekend nowadays brings with it a whole new slew of bank closings. This last one, though, was a stark change of pace. Regulators shut down just one institution â€" ""Pinehurst Bank"":http://www.pinehurstbank.com in St. Paul, Minnesota.

So far this year, ""73 FDIC-insured banks"":http://www.fdic.gov/bank/individual/failed/banklist.html have gone under. That's more than double the number of failures this time last year.

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The slowdown marked by Friday's solitary closing is not expected to last. As ""DSNews.com reported last week,"":http://dsnews.comarticles/fdic-adds-73-banks-to-troubled-watch-list-2010-05-20 the FDIC designated 73 additional banks' as at risk of failure during the first quarter of this year. Currently, 775 names sit on the federal agency's so-called ""problem list,"" with assets totaling $431 billion.

Pinehurst Bank had $61.2 million in assets, $58.3 million in deposits, and operated out of just one local branch office. ""Coulee Bank"":http://www.couleebank.net/WelcomeToCouleeBank in La Crosse, Wisconsin, agreed to take over the failed Minnesota bank in a deal brokered by the FDIC.

Coulee Bank paid the FDIC a premium of 1.33 percent for the newly acquired deposits, and unlike the vast majority of transactions for failed banks this year, the FDIC did not offer Coulee a loss-share agreement on the assets purchased.

The closing of Pinehurst, whose tagline was ""genuine neighborhood banking,"" is the latest of hundreds of small and mid-sized community banks to fall under the pressure of the nation's credit crisis and souring loans.

Pinehurst's failure is estimated to cost the FDIC $6 million. It is the sixth Minnesota bank to be seized in 2010.

About Author: Carrie Bay

Carrie Bay is a freelance writer for DS News and its sister publication MReport. She served as online editor for DSNews.com from 2008 through 2011. Prior to joining DS News and the Five Star organization, she managed public relations, marketing, and media relations initiatives for several B2B companies in the financial services, technology, and telecommunications industries. She also wrote for retail and nonprofit organizations upon graduating from Texas A&M University with degrees in journalism and English.
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