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Minnesota Bank Shuttered by Regulators

Multiple bank closures have become commonplace on Friday evenings, but last week, regulators shut the doors on just one institution â€" ""1st American State Bank of Minnesota"":http://www.1stamstatebank.com in Hancock, Minnesota.


The bank was closed by the Minnesota Department of Commerce. It operated two local branches in Hancock, with $16.3 million in deposits and $18.2 million in total assets.

As receiver, the FDIC reached an agreement with ""Community Development Bank"":http://www.comdevbank.com in Ogema, Minnesota to take over the failed 1st American State Bank's operations.

Community Development Bank did not pay the FDIC a premium for the acquired deposits, and agreed to purchase ""essentially all"" of the failed bank's assets, with the FDIC ""sharing the losses"":http://www.fdic.gov/bank/individual/failed/lossshare/index.html on approximately $11.7 million.

The FDIC said 1st American's closure will cost the agency's insurance fund an estimated $3.1 million. The Minnesota bank was one of the smallest institutions to go under this year. So far there have been ""16 bank failures in 2010"":http://www.fdic.gov/bank/individual/failed/banklist.html, and three in Minnesota alone.

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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