The Federal Deposit Insurance Corp. or FDIC, announced Friday the shuttering of one bank in Minnesota, taking the count of total U.S. bank closures in 2012 to 41, after 92 in 2011 and the 157 bank closures in 2010. This is the fourth FDIC-insured institution to fail in Minnesota this year. The bank was closed on Friday by the regulators, with the assets of the failed bank beings assumed by Republic Bank & Trust Co. in an FDIC assisted transaction. The FDIC estimates that the cost to the Deposit Insurance Fund or DIF, by the bank closure will be a total of $63.9 million.
Louisville, Kentucky-based Republic Bank acquired the banking operations, including all the deposits, of Bloomington, Minnesota-based First Commercial Bank, from the FDIC. Republic Bank is the subsidiary of Republic Bancorp, Inc. (RBCAA).
First Commercial Bank was closed by the Minnesota Department of Commerce. As of June 30, 2012, the bank had about $215.9 million in total assets and $206.8 million in total deposits.
Republic Bank agreed to purchase essentially all of the First Commercial Bank's assets, while assuming all of the deposits of the failed bank.
The FDIC noted that all customers of the sole branch of the failed bank can this evening and over the weekend access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed, and loan customers should continue to make their payments as usual.
Customers of failed banks are protected, by the FDIC, which has insured bank deposits since the Great Depression, currently covering customer accounts up to $250,000. The FDIC insures deposits at the nation's 7,246 banks and savings associations.
Banks failures have continued at a relatively steady pace in the eight months in 2012, though the size and number of closures are well below levels seen during the prior three years. At the same time last year, 71 banks had failed, 119 in 2010, and 92 in 2009.
On an average, 13 banks have failed per month in 2010, with bank closures for 2011 averaging only nearly eight per month, and currently averaging at just five in 2012.
The 92 bank closures in 2011 were down from 157 in 2010 and 140 in 2009, but nearly four times of the 25 bank failures in 2008. Only three banks failed in 2007. The highest and all time record for bank closures was in 1989 when 534 banks closed, followed by 181 bank failures in 1992.
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