May 25, 2009
The Federal Deposit Insurance Corporation stayed busy last week, closing two failed banks in Illinois that, combined, had nearly $1 billion in assets. They were the 35th and 36th U.S. banks to fail so far this year.
Citizens National Bank, Macomb, Illinois, was closed by the Office of the Comptroller of the Currency, which appointed FDIC as receiver. The FDIC entered into a purchase and assumption agreement with Morton Community Bank, Morton, Illinois, to assume all of the deposits of Citizens National Bank, excluding those from brokers.
As of May 13, 2009, Citizens National Bank had total assets of $437 million and total deposits of approximately $400 million. Morton Community Bank agreed to purchase approximately $240 million of assets. The FDIC will retain the remaining assets for later disposition.
The FDIC and Morton Community Bank entered into a loss-share transaction on approximately $200 million of Citizens National Bank's assets. Morton Community Bank will share in the losses on the asset pools covered under the loss-share agreement. The FDIC estimates that the cost to the taypayer will be $106 million.
Illinois regulators closed Strategic Capital Bank, Champaign, Illinois, appointing FDIC as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Midland States Bank, Effingham, Illinois, to assume all of the deposits of Strategic Capital Bank.
As of May 13, 2009, Strategic Capital Bank had total assets of $537 million and total deposits of approximately $471 million. In addition to assuming all of the deposits of the failed bank, Midland States Bank agreed to purchase approximately $536 million of assets. The FDIC will retain the remaining assets for later disposition.
The FDIC estimates that the cost to the Deposit Insurance Fund will be $173 million.
