Inter Savings Bank, fsb, whose condition has been deteriorating for more than four years, was closed Friday by the Comptroller of the Currency. It was the largest Minnesota-based financial institution to fail since the financial crisis of 2008. The bank, which operated under the DBA InterBank, fsb, was based in Maple Grove, Minn., and had four branches. With the FDIC acting as receiver, Great Southern Bank, Reeds Spring, Mo., assumed virtually all of the failed institution’s $473.0 million in deposits and $481.6 million in assets.
In 2008, Inter Savings Bank’s equity capital ratio dropped to 5.85 percent from 7.36 percent upon recording a net loss of $23 million for the year. Losses and capital depletion continued. In 2009, the bank lost $16 million and saw its capital drop to 3.87 percent; in 2010, it lost $13 million and its capital dropped to 2.21 percent. Last year, the federal savings bank lost $6 million and at year end its equity capital to assets ratio was 1.52 percent.
The FDIC and Great Southern agreed to a loss share transaction on $413.0 million of the assets. Read the FDIC press release here.
The FDIC estimates the cost to the Deposit Insurance Fund will be $117.5 million. It’s the 20th failure of an FDIC-insured institutions this year, and the third one in Minnesota. Since the 2008 financial crisis 20 banks (about 5 percent) have failed in Minnesota.