State regulators on Friday closed 1st Regents Bank in Andover, marking the first Minnesota bank failure in 2013.
The Federal Deposit Insurance Corporation (FDIC), which the Minnesota Department of Commerce appointed receiver, said Friday that Minnetonka-based First Minnesota Bank has agreed to assume all of 1st Regents’ deposits.
As of September 30, 1st Regents had roughly $50.2 million in assets and $49.1 million in deposits. It had a total risk-based capital ratio of 3.45 percent—significantly below the 10 percent threshold that regulators typically consider “well-capitalized.”
First Minnesota Bank will pay a premium of 2 percent to assume all of 1st Regents’ deposits, and it has also agreed to purchase “essentially all” of the bank’s assets, the FDIC said.
First Minnesota Bank had $392.2 million in assets as of September 30, according to FDIC data. Depositors of 1st Regents’ sole branch have become depositors of First Minnesota Bank under the terms of the FDIC-brokered deal.
1st Regents Bank is the second FDIC-insured institution to fail in the United States in 2013 and the first in Minnesota. The last closure in the state was Bloomington-based First Commercial Bank, which was shuttered in early September and whose assets and deposits were acquired by Louisville, Kentucky-based Republic Bank & Trust Company.
Minnesota bank closures have dropped significantly since 2010, when eight banks in the state were shuttered. Two Minnesota financial institutions failed in 2011 and four were closed in 2012; in addition to First Commercial Bank, Forest Lake-based Patriot Bank Minnesota, Little Falls-based Home Savings of America, and Maple Grove-based Inter Savings Bank were closed last year.