Central Minnesota bank acquires another failed bank

Stearns Bank, N.A., of St. Cloud, Minn., recently acquired its third failed bank in Georgia through the FDIC. It is the seventh failed institution Stearns Bank has acquired since October 2008..State authorities closed Covenant Bank & Trust of Rock Springs, Ga., on March 23. Stearns Bank picked up virtually all of the failed bank's $95.7 million in assets and $90.6 million in deposits. It obtained a loss-share agreement with the FDIC on $71.6 million of the assets..The acquisition raises the total assets acquired by Stearns Bank through failed bank deals to $1.111 billion. In addition, the bank picked up performing and non-performing residential and commercial construction loans in distressed markets worth several hundred million dollars in a deal with the FDIC announced in early 2009. Those assets remain in a separate Stearns Bank limited liability company..Currently reporting $1.174 billion in total assets, however, Stearns Bank has sold off many of the acquired assets. The June 30, 2008 call report lists Stearns Bank assets at the time at $1.030 billion.."Some of the loans we nurse along; we try to help people out when we can," said Stearns Bank Chairman Norman Skalicky. He said, however, that many of the loans are worthless; only 20 percent to 40 percent of the acquired loans, he said, have value..Skalicky said he likes working with the FDIC. "Someone has to work with the FDIC to cleanse the system, and we know there will be more although the FDIC seems to have slowed its pace of closings," he said..Among the failed bank acquisitions are two in Florida, one in Arizona and one in Minnesota.