To protect the depositors, the Federal Deposit Insurance Corporation (FDIC) has entered into a purchase and assumption agreement with Alerus Financial, Grand Forks, North Dakota, to assume all of the deposits of Prosperan Bank.

The three branches of Prosperan Bank have reopened as branches of Alerus Financial. In addition to assuming all of the deposits of the failed bank, Alerus Financial agreed to purchase approximately $173.9 million of the failed bank's assets.

The FDIC and Alerus Financial have entered into a loss-share transaction on approximately $173.9 million of Prosperan Bank's assets. Alerus Financial will share in the losses on the asset pools covered under the loss-share agreement.

According to the FDIC, 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.

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