A two-branch lender in Minnesota has become the 18th bank failure in the United States this year after it was shut down Friday.
Minnesota bank regulators announced that the Northern Star Bank, based in Mankato, has been taken over by the Federal Deposit Insurance Corp, the Associated Press reports.
The Minnesota Department of Commerce said the closure was caused by a lack of capital, continuing operating losses and a "large volume of problem assets", the Pioneer Press reports.
Customers will transfer to BankVista, based in Sartell, Minnesota, which has agreed to assume the assets and deposits of the bank, which as of October 2 totalled $18.7 million and $18.1 million respectively.
Customers shouldn't notice any difference to their service, and will still be able to access their money by writing checks and using debit cards and ATMs, while loan customers will continue to make payments as usual, the newspaper notes.
The Star Tribune reports that Northern Star had been operating under close scrutiny for the several years, and in summer 2009 it entered a consent order from the Federal Deposit Insurance Corp aimed at rectifying the bank's capital problems.