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Anyone hoping to reach MagnetBank in Cottonwood Heights this morning is out of luck. The doors are closed, and a letter from the FDIC is taped to the glass.
When you call the bank's number, you get this message: "MagnetBank has been closed by the Federal Deposit Insurance Corporation, appointed receiver."
Federal regulators announced Friday they closed MagnetBank, based at an office at 2825 E. Cottonwood Parkway, Suite 180. It was the fourth U.S. bank failure this year, but the first bank failure in Utah in almost five years.
Paul Allred with the Utah Department of Financial Institutions says it was to protect the public. "To make sure if there is a financial institution that is not being operated in a safe and sound manner, that the public's deposits are protected," he said.
MagnetBank mainly worked with commercial real estate loans. The bank was FDIC insured, and we're told there were no local depositors or checking accounts. State officials say they had been watching the bank for months, and told the bank to increase its capital in order to continue to operate safely. But it couldn't do it. The FDIC says it tried to find a buyer, but couldn't.
The Deseret News reports the bank was chartered Sept. 29, 2005. It says as of Dec. 2, MagnetBank's assets totaled about $293 million and total deposits were about $283 million.
Allred says state officials are keeping an eye on several other banks. "With the economy, there are many businesses that are struggling, and we have some banks that are finding it tough to continue to do what they've been doing. But we are always watching our banks to make sure everything is going the way it is supposed to," he said.
Customers seeking more information about the MagnetBank closure may call the FDIC at 1-800-822-0412, from 8 a.m. to 8 p.m. or see the link on this page.
The last bank failure in Utah was the Bank of Ephraim in June 2004.
E-mail: mrichards@ksl.com
