Jennings State Bank, Spring Grove, Minnesota

The honor of being the 97th FDIC bank failure of 2009 goes to Jennings State Bank, Spring Grove, Minnesota, while all the failed bank’s deposits goes to Central Bank, Stillwater, Minnesota. The FDIC estimates a hit to the Deposit Insurance Fund (DIF) of about $11.7 million.

Jennings State Bank, Spring Grove, Minnesota, was closed today by the Minnesota Department of Commerce, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Central Bank, Stillwater, Minnesota, to assume all of the deposits of Jennings State Bank.

The two branches of Jennings State Bank will reopen on Saturday as branches of Central Bank. Depositors of Jennings State Bank will automatically become depositors of Central Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branch until they receive notice from Central Bank that it has completed systems changes to allow other Central branches to process their accounts as well.

This evening and over the weekend, depositors of Jennings State Bank can 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 July 31, 2009, Jennings State Bank had total assets of $56.3 million and total deposits of approximately $52.4 million. Central Bank did not pay the FDIC a premium for the deposits of Jennings State Bank. 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 approximately $37.7 million of Jennings State Bank’s assets. Central Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-share arrangement is projected to maximize returns on the assets covered by keeping them in the private sector. The agreement also is expected to minimize disruptions for loan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html.

Customers who have questions about today’s transaction can call the FDIC toll-free at 1-800-528-6215. The phone number will be operational this evening until 9:00 p.m., Central Daylight Time (CDT); on Saturday from 9:00 a.m. to 6:00 p.m., CDT; on Sunday from noon to 6:00p.m.,., CDT; on Sunday from noon to 6:00 p.m., CDT; and thereafter from 8:00 a.m. to 8:00 p.m., CDT.

For more information visit the FDIC’s Web site for Jennings State Bank.

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