Losses from the failure of a midwestern bank are expected to reach nearly a third of its total assets. Meanwhile, a pair of Michigan credit unions were liquidated.
The Minnesota Department of Commerce on Friday seized Northern Star Bank and closed down the financial institution.
Northern Star was based in Mankato, Minn., and founded in 1999. As of Sept. 30, there were just seven people employed by the bank.
It had $19 million in assets including $5 million in residential loans, $1 million in commercial real estate loans and less than $1 million in construction-and-land-development loans.
Deposits stood at $18 million.
The Federal Deposit Insurance Corp. was appointed receiver of the failed bank.
In November 2011, the FDIC issued a cease-and-desist order against Northern Star.
In addition, the regulator issued another cease-and-desist order against the bank in July 2009, while parent Northern Star Financial Inc. entered formal agreements in September 2009 with the FDIC and the Federal Reserve Bank of Minneapolis.
BankVista won a secret auction and will assume all of Northern Star’s deposits and take over all of its assets.
Given Northern Star’s size, the $6 million in losses projected by the FDIC is significant.
So far this year, 18 FDIC-insured banks have failed.
Health One Credit Union, which was placed into conservatorship in May, was liquidated on Dec. 12 by the Michigan Department of Insurance and Financial Services.
Earlier this month, the Michigan regulator liquidated Metropolitan Church of God Credit Union of Detroit and appointed the National Credit Union Administration as liquidating agent.
The decision to liquidate followed a determination that the
credit union was insolvent and had no prospect of restoring viable operations.
The credit union was chartered in 1971. It had just 191 members and $0.1 million in assets.
Including Metropolitan Church of God Credit Union, Mortgage Daily has tracked the failure of 10 credit unions so far during 2014.
Including financial and non-bank lenders, Mortgage Daily has covered 41 mortgage-related entities that have failed or closed down this year.