WASHINGTON — State regulators have shut down a Mississippi community bank that they say lost $11 million because of bad loans and employee fraud.

Mississippi banking commissioner John S. Allison said he ordered the closure Friday of the Bank of Falkner, which had $88.8 million of assets, after the losses were disclosed. He said some of the losses were attributable to poor lending decisions, but that many were the fault of a bank official who had manipulated internal documents and accounts over a two-year period.

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