Federal regulators close Minnesota-based bank, twelfth U.S. bank failure of 2010January 30th, 2010 - 4:39 pm ICT by BNO News
HALLOCK, MINNESOTA (BNO NEWS) — Federal regulators on Friday closed the Marshall Bank, National Association in Hallock, Minnesota marking the eleventh U.S. bank failure of 2010 following an economic turbulent year that saw more than one hundred U.S. banks fail.
The Marshall Bank, N.A. was closed by the Office of the Comptroller of the Currency after its regular closing time on Friday. The Federal Deposit Insurance Corporation (FDIC) was appointed as receiver following its closure, who immediately entered into a purchase and assumption agreement with the North Dakota-based United Valley Bank to assume all of the failed bank’s deposits.
Most, if not all customers, should see no or little service disruptions despite the closure of the institution. On Saturday, all 3 branches of the Marshall Bank, N.A. will reopen during their normal business hours as branches of United Valley Bank.
All of the failed bank’s services, including checks, ATM and debit cards, will remain active. “Checks drawn on the bank will continue to be processed,” the FDIC said in a statement. “Loan customers should continue to make their payments as usual.”
As of September of last year, the Marshall Bank, N.A. had approximately $59.9 million in total assets and $54.7 million in total deposits. United Valley Bank paid the FDIC a premium of 7.35 percent to assume Marshall Bank, N.A. deposits, the FDIC said. “In addition to assuming all of the deposits of the failed bank, United Valley Bank agreed to purchase essentially all of the failed bank’s assets.”
The FDIC and United Valley Bank entered into a loss-share transaction on approximately $23.9 million of Marshall Bank, N.A.’s assets. United Valley Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers.
The FDIC said it estimates that the cost to the Deposit Insurance Fund (DIF) will be $4.1 million. It said United Valley Bank’s acquisition of the deposits was the “least costly” resolution compared to other alternatives.
Friday’s closure was not only the twelfth U.S. bank failure of 2010 but was also Minnesota’s second bank this year. Regulators last closed the St. Stephen State Bank in St. Stephen.
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