ST. PAUL, Minn. (
) -- Following five weeks of multiple bank failures, regulators shut down just one community bank Friday, bringing the total number of failed banks for 2010 to 73.
The Minnesota Department of Commerce took over
of St. Paul and appointed the Federal Deposit Insurance Corp. receiver. Pinehurst Bank had $61 million in total assets and $58 million in deposits. The FDIC sold the deposits for a 1.33% premium to
of La Crosse, Wis.
Coulee Bank also agreed to assume the failed bank's assets, and the FDIC estimated the cost to its deposit insurance fund would be $6 million.
Pinehurst's office was scheduled to reopen Saturday as a branch of Coulee Bank.
Pinehurst Bank was established in April 2004 and was heavily concentrated in commercial real estate and construction lending. With loan losses mounting, the bank's fortunes sank in the third quarter, when a net loss of $2.6 million left it undercapitalized per regulatory guidelines.
The bank previously had received an E-minus (Very Weak) financial strength ratings by
and the institution was included in
of undercapitalized institutions.
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A March 25 consent order from the FDIC required Pinehurst to improve its management staff, reduce problem assets, improve credit administration and submit an acceptable plan to quickly raise capital.
The details of the management deficiencies listed in the
raise the question of why the agency didn't address these concerns months or years before the institution's credit concentrations and the souring real estate market wiped out its capital.
Ongoing Bank Failure Coverage
All previous bank and thrift failures since the beginning of 2008 are detailed in
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The bank failure map is color-coded, with the states that have the greatest number of failures highlighted in red, and the states with no failures highlighted in gray. By moving your mouse over a state you can see its combined 2008-2010 totals. Clicking on the state will open a detailed map pinpointing the locations of the failures and providing additional information for each bank failure.
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Written by Philip van Doorn in Jupiter, Fla.
Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.