Two Illinois Banks Fail

2009 Total Now up to 36 Two banks were closed by Illinois and federal banking regulators on Friday, May 22, bringing the total number of failed banks thus far to 36 in 2009.

Strategic Capital Bank, Champaign, IL, was closed by the Illinois Department of Financial and Professional Regulation, Division of Banking. The Federal Deposit Insurance Corporation (FDIC) was appointed receiver and the Midland States Bank, Effingham, IL will assume all the deposits of the failed bank. The bank was to reopen today as a branch of Midland States Bank.

At the time of its closing, Strategic Capital Bank had total assets of $537 million and total deposits of approximately $471 million. Midland States Bank will also buy $536 million of the failed bank's assets. FDIC and Midland States Bank have agreed to a loss-share transaction on approximately $420 million of Strategic Capital Bank's assets. The cost to the FDIC's Deposit Insurance Fund (DIF) will be $173 million.

Also on Friday the Office of the Comptroller of the Currency closed Citizens National Bank, of Macomb, IL and appointed the FDIC as receiver. The FDIC arranged for Morton Community Bank, Morton, IL to assume all the deposits of the failed bank.

The failed bank's branches opened on Saturday as Morton Community Bank branches. The failed bank had assets of $437 million and deposits of $400 million. Morton Community Bank also bought $240 million of the failed bank's assets. It will purchase all deposits, except about $200 million in brokered deposits, held by Citizens National Bank. The FDIC and Morton Community Bank agreed to a loss-share transaction on approximately $200 million of Citizens National Bank's assets. The estimated cost to the FDIC's Deposit Insurance Fund (DIF) will be $106 million.


About the Author

Linda McGlasson

Linda McGlasson

Managing Editor

Linda McGlasson is a seasoned writer and editor with 20 years of experience in writing for corporations, business publications and newspapers. She has worked in the Financial Services industry for more than 12 years. Most recently Linda headed information security awareness and training and the Computer Incident Response Team for Securities Industry Automation Corporation (SIAC), a subsidiary of the NYSE Group (NYX). As part of her role she developed infosec policy, developed new awareness testing and led the company's incident response team. In the last two years she's been involved with the Financial Services Information Sharing Analysis Center (FS-ISAC), editing its quarterly member newsletter and identifying speakers for member meetings.




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