On Friday, May 21, 2010, 1 BANK was SHUT DOWN by U.S. regulators. This failed institution was located in Saint Paul, Minnesota. This brings the total number of US Bank Failures to 73 so far in 2010, compared to 140 in 2009, 25 in 2008 and 3 in 2007. If bank failures continue at this pace, an estimate of over 190 banks will fail in 2010. The Federal Deposit Insurance Corp. (“FDIC”) estimates the cost of the bank closure to its Deposit Insurance Fund will be approximately $6.0 million.
Pinehurst Bank located in St. Paul, Minnesota, was closed by the Minnesota Department of Commerce, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. The FDIC entered into a purchase and assumption agreement with Coulee Bank, La Crosse, Wisconsin, to assume all of the deposits of Pinehurst Bank. As of March 31, 2010, Pinehurst Bank had approximately $61.2 million in total assets and $58.3 million in total deposits. Coulee Bank will pay the FDIC a premium of 1.33% to assume all of the deposits of Pinehurst Bank. In addition to assuming all of the deposits of the failed bank, Coulee Bank agreed to purchase essentially all of the assets. Pinehurst Bank is the 73rd FDIC-insured institution to fail in the nation this year, and the sixth in Minnesota. The last FDIC-insured institution closed in the state was Access Bank, Champlin, on May 7, 2010.
Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation’s banking system. The FDIC insures deposits at the nation’s 7,932 banks and savings associations and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. The FDIC receives no federal tax dollars – insured financial institutions fund its operations.
