(CNN) -- (CNN) -- The hostage standoff in St. Joseph, Louisiana, has ended with the hostage-taker and one hostage dead, police said.
Louisiana State Police shot and killed Fuaed Abdo Ahmed as they stormed the Tensas State Bank, just before midnight local time, according to Col. Michael Edmonson. He said the gunman had threatened to kill the hostages.
The two hostages -- a man and a woman -- were both shot by Ahmed as the police SWAT team entered the bank, Edmonson said.
One of the hostages later died, and the condition of the second former hostage remains critical.
Police said Ahmed was known to police, and Edmonson described him as a paranoid schizophrenic. Ahmed told hostage negotiators that he heard voices and wanted to have a device removed from his head.
Edmonson said authorities believe Ahmed planned the events at the bank. They found a book on hostage negotiations at the bank after he was killed.
Earlier in the evening, one bank employee was freed, while two of her colleagues remained held at gunpoint.
Born in California, Ahmed moved with his family to northeastern Louisiana, where his family owns a convenience store, Edmonson said.
The Mississippi River community of St. Joseph is about 35 miles south of Tallulah, Louisiana, and 35 miles north of Natchez, Mississippi. It is the seat of Tensas Parish, which has about 5,000 people.
The incident began around 12:30 p.m., when the 20-year-old man entered the bank branch in St. Joseph with a handgun, taking the three bank employees hostage, according to officials.
After word got out about the hostage situation, local, state and federal law enforcement agents descended on the quiet community.
Law enforcement agents were able to talk to the hostages. They also spoke with the gunman.
Edmonson said he talked to, and prayed with, relatives of the hostages.
CNN's Alina Machado, Greg Botelho and Joe Sutton contributed to this report.