Prosperan Bank, Oakdale, Minnesota, was closed Friday by the Minnesota Department of Commerce, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver.
Prosperan Bank was one of five banks closed by regulators on Friday, and one of 120 closed this year.
To protect the depositors, the FDIC has entered into a purchase and assumption agreement with Alerus Financial, National Association, of Grand Forks, North Dakota, to assume all of the deposits of Prosperan Bank.
The three branches of Prosperan Bank will reopen during their normal business hours as branches of Alerus Financial, N.A. Depositors of Prosperan Bank will automatically become depositors of Alerus Financial, N.A. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage, the FDIC said in a statement Friday. Customers should continue to use their existing branches until Alerus Financial, N.A. can fully integrate the deposit records of Prosperan Bank.
Over the weekend, depositors of Prosperan Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual, the FDIC said.
As of August 31, 2009, Prosperan Bank had total assets of $199.5 million and total deposits of approximately $175.6 million. Alerus Financial, N.A. will pay the FDIC a premium of 1.02 percent to assume all of the deposits of Prosperan Bank. In addition to assuming all of the deposits of the failed bank, Alerus Financial, N.A. agreed to purchase approximately $173.9 million of the failed bank's assets.
The FDIC and Alerus Financial, N.A. entered into a loss-share transaction on approximately $173.9 million of Prosperan Bank's assets. Alerus Financial, N.A. will share in the losses on the asset pools covered under the loss-share agreement.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $60.1 million.
For more information listen to KFGO 790AM or email studio@kfgo.com
Source: nepalnews.net, KFGO News Center
November 20, 2009
