Red Rock On Air

June 26, 2009 at 6:00 p.m. CST — Stearns Bank N.A. headquartered in St. Cloud, Minnesota acquired Horizon Bank of Pine City and North Branch, Minnesota.  Insured depositors and loan customers of Horizon Bank will automatically become depositors and customers of Stearns Bank and will retain uninterrupted services and access to their accounts.

Stearns Bank is an independently owned financial institution established in 1912, under current ownership since 1964.  Stearns Bank has grown to more than $1 billion in assets with locations in St. Cloud, Albany, Holdingford, and Upsala MN, along with Scottsdale, Arizona.  Stearns also has a nationwide Equipment Finance division based in Albany, MN and a National Accounts Receivable division located in Utah.

Norman C. Skalicky, CEO of Stearns Bank said, “We are very pleased to have the opportunity to welcome the customers of Horizon Bank to Stearns Bank.  We have always maintained a strong capital position at Stearns Bank.  This strategy, along with the confidence provided by our regulators, is very important in these unparalleled economic times.  Stearns bank stands ready to meet the financial needs of our communities, and we are very optimistic of the opportunities before us.”

As of March 31, 2009, Horizon Bank had total assets of $87.6 million and total deposits of approximately $69.4 million. Stearns Bank, N.A. paid a premium of 0.75 percent to acquire all of the deposits of the failed bank. In addition to assuming all of the deposits of the failed bank, Stearns Bank, N.A. agreed to purchase approximately $84.4 million of assets. The FDIC will retain the remaining assets for later disposition.

The FDIC and Stearns Bank, N.A. entered into a loss-share transaction on approximately $65.1 million of Horizon’s assets. Stearns Bank, N.A. will share in the losses on the asset pools covered under the loss-share agreement. The loss-sharing 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.

Customers who have questions about today’s transaction can call the FDIC toll-free at 1-866-954-9531. 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 6:00 p.m., CDT; and thereafter from 8:00 a.m. to 8:00 p.m., CDT. Interested parties can also visit the FDIC’s Web site at www.fdic.gov/bank/individual/failed/horizon.html

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $33.5 million. Stearns Bank’s, N.A. acquisition of all the deposits was the “least costly” resolution for the FDIC’s DIF compared to alternatives. Horizon Bank is the 43rd FDIC-insured institution to fail in the nation this year, and the first in Minnesota. The last FDIC-insured institution to be closed in the state was First Integrity Bank, N.A., Staples, on May 30, 2008.