FDIC Closes Four Banks, Year’s Total Now 57

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The FDIC closed four more banks today,  all four in Illinois,  bringing the year’s total to 52. The agency late in 2009 made member banks prepay their insurance so that the agency, nearly out of money, could fund its activities. The only alternative would have been to turn to the Treasury for the money. The action brought in about $45 billion. Whether that money will cover the cost of the numerous closures expected this year and next is unclear.

Closed today: New Century Bank, Chicago, IL, Citizens Bank&Trust Company of Chicago, Chicago, IL Broadway Bank, Chicago, IL, Amcore Bank, N.A., Rockford, IL.

The FDIC reported the disposition of New Century assets:

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $125.3 million. MB Financial Bank, National Association’s acquisition of all the deposits was the “least costly” resolution for the FDIC’s DIF compared to all alternatives. New Century Bank is the 54th FDIC-insured institution to fail in the nation this year, and the seventh in Illinois. The last FDIC-insured institution closed in the state was Citizens Bank&Trust Company of Chicago, Chicago, earlier today.

Citizens Bank&Trust:

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $20.9 million. Republic Bank of Chicago’s acquisition of all the deposits was the “least costly” resolution for the FDIC’s DIF compared to all alternatives. Citizens Bank&Trust Company of Chicago is the 53rd FDIC-insured institution to fail in the nation this year, and the sixth in Illinois.

Broadway Bank:

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $394.3 million. MB Financial Bank, National Association’s acquisition of all the deposits was the “least costly” resolution for the FDIC’s DIF compared to all alternatives. Broadway Bank is the 52nd FDIC-insured institution to fail in the nation this year, and the fifth in Illinois.

Amcore;

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $220.3 million. Harris National Association’s acquisition of all the deposits was the “least costly” resolution for the FDIC’s DIF compared to all alternatives. Amcore Bank, National Association is the 51st FDIC-insured institution to fail in the nation this year, and the fourth in Illinois

At the current rate bank closings this year will be well over 200.

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Douglas A. McIntyre