Regulators shutter The RiverBank; Central Bank assumes assets
The RiverBank, with locations in North Hudson, Somerset, Osceola, St. Croix Falls and two Minnesota communities, was closed late Friday by the Minnesota Department of Commerce.
The Federal Deposit Insurance Corp. was named receiver and all deposits have been transferred to Central Bank, Stillwater, Minn., according to an FDIC press release.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $71.4 million. Compared to other alternatives, Central Bank's acquisition was the least costly resolution for the FDIC's DIF, the release stated.
The six branches of The RiverBank were to reopen Saturday as branches of Central Bank. Depositors of The RiverBank will automatically become depositors of Central Bank.
Central Bank already has a Hudson location at 944 Carmichael Road, acquired when it came to the rescue of the failed Mainstreet Bank in 2008. Before the RiverBank acquisition, Central Bank had 16 locations, mostly in the Twin Cities area.
Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage up to applicable limits.
Customers of The RiverBank should continue to use their existing branch until they receive notice from Central Bank that it has completed systems changes to allow other Central Bank branches to process their accounts as well, the FDIC said.
Over the weekend, depositors of The RiverBank were to be able to 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.
As of June 30, 2011, The RiverBank had approximately $417.4 million in total assets and $379.3 million in total deposits. In addition to assuming all of the deposits of the failed bank, Central Bank agreed to purchase essentially all of the assets.
The FDIC and Central Bank entered into a loss-share transaction on $339.3 million of The RiverBank's assets. Central Bank will share in the losses on the asset pools covered under the loss-share agreement.
The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers.
Customers with questions about the FDIC action can call the FDIC toll-free at 1-877-367-2717, Saturday from 9 a.m. to 6 p.m.; on Sunday from noon to 6 p.m., and thereafter from 8 a.m. to 8 p.m., CDT, or visit the FDIC's Web site at www.fdic.gov/bank/individual/failed/riverbank.html.
The RiverBank is the 75th FDIC-insured institution to fail in the nation this year, and the second in Minnesota. The last FDIC-insured institution closed in the state was Rosemount National Bank, Rosemount, on April 15, 2011.
All shares of The RiverBank were owned by its holding company, Osceola Bancorporation, Inc., Osceola, WI. The holding company was not included in the closing of the bank or the resulting receivership, the FDIC noted in its press release.
Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's banking system. The FDIC insures deposits at the nation's 7,513 banks and savings associations, and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. The FDIC receives no federal tax dollars -- insured financial institutions fund its operations.