By Mark Huffman
ConsumerAffairs.com
April 25, 2010
The rash of bank failures of 2009 has continued unabated in 2010. So far this year, 57 banks have failed, including seven in Illinois forced to close their doors last week.
The Federal Deposit Insurance Corporation (FDIC) stepped in last week to protect depositors of the seven financial institutions. They included four banks in Chicago, one in Rockford, one in Peotone and one in Naperville.
The failed Chicago banks include Broadway Bank, with $1.2 billion in assets; New Century Bank, with $485.6 million; Lincoln Park Savings, with $199.9 million in assets and Citizens Bank & Trust, with $77.3 million.
Wheaton Bank & Trust agreed to assume all of the deposits of Wheatland Bank, Naperville; First Midwest Bank, Itasca, assumes the deposits of Peotone Bank and Trust Company, Peotone; Northbrook Bank and Trust Company, Northbrook, takes over Lincoln Park Savings Bank, Chicago; MB Financial Bank, National Association, Chicago, takes over Broadway Bank and New Century Bank, both of Chicago; Republic Bank Of Chicago, Oak Brook, assumes all of The deposits of Citizens Bank & Trust Company Of Chicago; and Harris National Association, Chicago, assumes all of the deposits of Amcore Bank, National Association, Rockford.
Most of the failed banks had many real estate loans that have gone bad, saddling the banks with huge losses. In fact, most recent bank failures have been in markets where the real estate market has suffered steep declines.
Other states that have experienced large numbers of bank failures include California, Goergia, Florida and Michigan. While previous real estate losses have mostly been on residential mortgages, there's concern that many commercial real estate loans could go bad in the future.
Last year 140 U.S. banks failed. If the present rate continues, this year's failure rate would be more than 170, a 21 percent increase. To protect the depositors, FDIC expects it will have to pay clofile:///home/jhood/caweb/news04/2010/04/il_banks.htmlse to $100 billion over the next four years.
