Once led by ex-Viking Stu Voigt, the bank ran afoul of the FDIC. A Kentucky bank bought its assets and will keep its sole office open.
Regulators shut down troubled First Commercial Bank in Bloomington on Friday and sold it to Republic Bancorp Inc., a $3.3 billion bank holding company based in Kentucky.
Republic bought substantially all of First Commercial's $215.9 million in assets and $206.8 million deposits. For the near term, First Commercial's sole office will continue operating under the First Commercial name as a division of Republic Bank & Trust Co., its new owners said.
"We welcome FCB's clients to the Republic family," the bank said in its release.
First Commercial Bank is the fourth Minnesota bank this year to be closed by regulators, and its sale marks the end of the line for a lender with a short and rocky history.
Founded in 1999, First Commercial was part of the de novo bank boom in the late 1990s and early 2000s and became an active commercial real estate lender. (De novo refers to a newly chartered bank.) It eventually ran afoul of bank regulators, and in 2009 the Federal Deposit Insurance Corp. ordered it to clean up its books.
Late last year, the FDIC disclosed it was wrangling with the bank's high-profile former chairman, ex-Viking Stu Voigt. That dispute ended this summer when Voigt agreed to stay out of banking and pay $15,000 to settle regulators' accusations of illegal activity while he was the bank's chairman.
Voigt also has been the target of a federal criminal investigation, but the status of that probe isn't clear.
In its release, Republic Bancorp said it acquired First Commercial's loans and repossessed real estate with a book value of about $194 million, at a discount of $79 million.
It doesn't have a loss-sharing agreement with the FDIC, it said, and was not acquiring any assets or liabilities of First Commercial Bank's parent Commercial Bancshares Inc., or any of its privately held stock.
Louisville-based Republic Bancorp has 43 locations in Kentucky, Indiana, Ohio, Florida and Tennessee and posted profits of $92 million in the first half of the year.
Jennifer Bjorhus 612-673-4683