Weak Minnesota Bank Is Shut Down - TheStreet

Weak Minnesota Bank Is Shut Down

First Integrity Bank is closed by regulators. A TSC Ratings analysis had shown it had a negative capital ratio.
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Late Friday, the Office of the Comptroller of the Currency announced the closing of First Integrity Bank of Staples, Minn., appointing the Federal Deposit Insurance Corporation as receiver. First Integrity had $54.7 million in total assets and $50.3 million in total deposits as of march 31, 2008.

In a look at

banks in dire need of capital

last week, First Integrity's capital position was so weak its capital ratios were negative. The institution had the weakest capital position of any depository institution in the country.

TheStreet.com Ratings had downgraded First Integrity's financial strength rating to an E- (very weak) in December 2007, after having downgraded the institution to a D (weak) back in June 2007.

In announcing First Integrity's failure, the OCC cited unsafe and unsound practices that led to losses that "depleted all or substantially all of its capital."

First Integrity's two offices were taken over by First International Bank and Trust, of Watford City, N.D., and were reopened Saturday morning. First International is a much larger institution than First Integrity, with total assets of $874 million and 16 offices, including the two just acquired, in North Dakota, Arizona and now Minnesota.

David Barr, the FDIC's Assistant Director for Public Affairs confirmed that First International took over all of First Integrity's deposits, so there were no depositors left wondering if they would lose some or all of their uninsured deposits.

When

ANB Financial failed

earlier in May, there were 647 accounts with uninsured funds, and the depositors didn't know how much of their uninsured deposits would be recovered.

Some customers with

brokered deposits

also faced delays in getting their money.

With four banks having failed so far this year, it's important to know how well positioned your bank or savings and loan is to weather the economic storm.

While most depositors are protected by FDIC insurance, you or someone you know is probably affiliated with a business or municipality (such as a school district) with large deposits in a local bank. Because most of these deposits are uninsured, it's important to monitor bank ratings using TheStreet.com's

Ratings Screener

.

Philip W. van Doorn joined TheStreet.com Ratings., Inc., in February 2007. He is the senior analyst responsible for assigning financial strength ratings to banks and savings and loan institutions. He also comments on industry and regulatory trends. Mr. van Doorn has fifteen years experience, having served as a loan operations officer at Riverside National Bank in Fort Pierce, Florida, 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.