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 Ã¢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.[IMAGE] [COLUMN_BREAK]
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.