Pinehurst Bank, the $61 million bank with its only office in the Highland Village neighborhood of St. Paul, was closed Friday by Kevin Murphy’s team at the Minnesota Department of Commerce.
Last year, Pinehurst reported a $3.3 million net loss. In the first quarter, the state’s 243rd-largest bank suffered a net loss of $1.2 million and by March 31 it was showing an equity capital ratio of negative 0.73 percent. It was the sixth Minnesota bank to fail this year.
Tom Palmer, who worked for years at Franklin National Bank in Minneapolis and then First National Bank in River Falls, Wis., has devoted his career recently to helping banks work with regulators as they near termination. He was president of St. Stephen State Bank near St. Cloud when regulators closed it on Jan. 26, and he was president at Riverview Community Bank in Otsego, which regulators closed Oct. 23. He had been president of Pinehurst since February.
Coulee Bank of La Crosse, Wis., gains a foothold in the Twin Cities market as a result of the Pinehurst failure. The bank, headed by Dirk Gasterland, paid a 1.33 percent premium to the FDIC to pick up Pinhurst’s $58.3 million in deposits and nearly all of its $61.2 million in assets. The FDIC press release makes no mention of any kind of loss-share agreement on the purchased assets.
Will there be more bank failures in Minnesota this year? No one can say for certain. Data released by the FDIC at the close of the first quarter shows that two of Minnesota’s 411 banks have equity capital ratios between 3.0 and 3.6 percent. These are the lowest in the state at this time. Access Bank of Champlin, Minn., which was closed May 7, reported a negative 0.31 percent equity capital ratio at the end of the first quarter.