Two Illinois Banks Fail

Cost to taxpayers is $173 million

May 25, 2009

• Failed Bank Toll Keeps Rising • FDIC Closes Nine More Banks • Bank Closings Pass 100 for 2009 • California Bank Failure Is 99th Of 2009 • FDIC: Bank Fund In The Red • Regulators Seize Atlanta's Second-Largest Bank • Chicago's Corus Bank Fails as Condo Loans Sour • Taylor Bean-Linked Platinum Bank Fails • Three More Banks Go Under • More Than 400 Banks on Endangered List as FDIC Fund Shrinks • Feds Seize Guaranty Bank of Texas, 10th-Largest Failure In U.S. History • Feds Seize Colonial Bank, 6th-Largest Failure In U.S. History • Five More Banks Fail • Two Illinois Banks Fail • Two More Banks Fail • FDIC Warns It's Running Out of Funds • Oregon Bank Fails; No. 14 This Year • Four More Banks Fail • FDIC Closes Three More Banks • Feds Seize Mortgage Lender IndyMac • FDIC Seizes West Virginia Bank, More Likely to Follow

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.

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