For immediate release: Friday, July 17, 2009

 

For more information: contact Bret Afdahl, Division of Banking, 605-773-3421

 

 

 

PIERRE, S.D. - Roger Novotny, Director of the Division of Banking for the South Dakota Department of Revenue and Regulation, took possession of BANKFIRST, Sioux Falls, effective at the close of business on Friday, July 17, 2009.

 

Novotny placed the bank into receivership and it is under the control and management of the FDIC. The FDIC has entered into an agreement with multiple institutions whereby certain assets and deposits will transfer over to these institutions. First Dakota National Bank, Yankton, SD will assume the Sioux Falls branch and deposits. Alerus Financial, Grand Forks, ND will assume the Minneapolis branch and deposits. The loans have been purchased by Beal Bank, Las Vegas, Nevada. First Farmers and Merchants Bank, Luverne, MN, has bought the loan servicing platform.

 

All South Dakota deposit customers of BANKFIRST will become depositors of First Dakota National Bank immediately and will have uninterrupted access to their funds. First Farmers and Merchants Bank, Luverne, MN will service all loan customers.

 

“The closing of BANKFIRST in no way reflects a weakened condition of the South Dakota Banking system or the South Dakota economy,” Novotny stressed.

 

“BANKFIRST’s business model was predominantly centered on the origination of large complex commercial, construction, development, and multi-family residential loans,” he said. “These loans were located in high growth metropolitan or urban areas nationwide that have seen significant downturns in their local economies. As loan losses multiplied, the bank’s capital declined to an unsafe level. Bank management was unsuccessful in raising additional capital.”

 

On March 31, 2009, BANKFIRST had $277.7 million in total assets, $256.3 million in deposits and net loans of $166 million.

 

It has been more than 20 years since the South Dakota Division of Banking has had to close a bank, Novotny said.

 

First Dakota National Bank will be open for business on Monday, July 20, 2009. Deposit customers 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.

 

BANKFIRST was wholly owned by Marshall BankFirst Corporation, which is headquartered in Minneapolis, Minn. In addition to its Sioux Falls location, BANKFIRST operated one branch location in Minneapolis. The bank was purchased by the Marshall BankFirst Corporation in January 2005.

 

Consumers with questions about deposits or loans with BANKFIRST can call the branch in Minneapolis at 612-359-8700 or main office in Sioux Falls at 605-361-2111. Individuals with questions about today's transaction or wanting more information about the closing of BANKFIRST can call the FDIC toll-free at 1-800-523-8209, until 11:59 p.m. on Friday, July 17, 2009, on Saturday from 8 a.m. to 9 p.m., on Sunday from 8 a.m. to 6 p.m., and thereafter from 8 a.m. to 5 p.m. All times are Central Daylight Time.

 

For additional information about bank closures and the FDIC, visit www.fdic.gov

 

Useful consumer information can also be found at:

 

To view the order appointing the FDIC receiver for BANKFIRST, visit:

 

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