Rosemount National Bank, a tiny community bank in Rosemount, was closed Friday by federal regulators and taken over by Central Bank of Stillwater.
The failure is Minnesota's first of the year, and involves one of the smallest banks in the state with just $38 million in assets. The bank's sole branch in Rosemount will reopen Saturday as Central Bank, with deposits still insured by the Federal Deposit Insurance Corp.
For Central Bank, the deal is the latest in a string of failed-bank acquisitions. Central Bank has acquired four shuttered Minnesota banks and one in Fort Myers, Fla., since the financial crisis began nearly four years ago.
The acquisitions have nearly doubled Central Bank's assets to $777 million from $430 million two years ago.
Founded in 1982, Rosemount National specialized in commercial loans, often backed by commercial real estate. Like many community banks, it lacked an adequate cash cushion to cover losses when real estate loans began to sour. The bank's total equity fell from $5.6 million in 2008 to just $899,000 at the end of 2010.
Despite Rosemount National's failure, the pace of bank shutdowns has slowed considerably in Minnesota. At this point last year, regulators had seized four of the state's community banks.
Out of 404 banks in Minnesota, Rosemount National ranked 314th by assets. The FDIC estimates that the bank's failure will cost the deposit insurance fund $3.6 million. An FDIC spokesman said terms of the transaction were not available Friday.
Bank closings have become a weekly ritual. On Friday, regulators also shut down two banks in Alabama, two in Georgia and one in Mississippi. All told, 34 banks have failed this year and 359 have failed since the financial crisis began. Together, these banks had nearly $650 billion in assets.
Chris Serres • 612-673-4308