7 Failed Banks For July 2, 2009 – $314 Million In Losses To FDIC

Failed Banks

There were seven more failed banks this week on July 2, 2009 as detailed below:

  1. Founders Bank, Worth, IL
  2. Millennium State Bank of Texas, Dallas, TX
  3. First National Bank of Danville, Danville, IL
  4. Elizabeth State Bank, Elizabeth, IL
  5. Rock River Bank, Oregon, IL
  6. First State Bank of Winchester, Winchester, IL
  7. John Warner Bank, Clinton, IL

2009 has now seen a total of 27 more failed banks than occurred for all of 2008.  The latest 7 banking closures by the FDIC brings total banking failures for 2009 to 52.

The FDIC estimates that the seven latest banking failures will cost the FDIC Deposit Insurance Fund (DIF) $314.3 million.

According to the FDIC, “The six failed Illinois banks are all controlled by one family and followed a similar business model that created concentrated exposure in each institution. The failure of these banks resulted primarily from losses related to the banks’ investment in collateralized debt obligations and other loan losses.”

The seven failed banks had total assets of $1,460.5 billion.  The total estimated FDIC losses on these failed banks of $314.3 million represents a 21% loss of total assets.

1.  Founders Bank, Worth, IL

Founders Bank, Worth, Illinois, was closed today by the Illinois Department of Financial and Professional Regulation, Division of Banking, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with The PrivateBank and Trust Company, Chicago, Illinois, to assume all of the deposits of Founders Bank.

As of April 30, 2009, Founders Bank had total assets of $962.5 million and total deposits of approximately $848.9 million. The PrivateBank and Trust Company paid a premium of 1.5 percent to acquire all of the deposits of the failed bank. In addition to assuming all of the deposits of the failed bank, The PrivateBank and Trust Company agreed to purchase approximately $888.4 million of assets. The FDIC will retain the remaining assets for later disposition.

The FDIC and The PrivateBank and Trust Company entered into a loss-share transaction on approximately $617 million of Founder’s assets.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $188.5 million. The PrivateBank and Trust Company’s acquisition of all the deposits was the “least costly” resolution for the FDIC’s DIF compared to alternatives. Founders Bank is the 52nd FDIC-insured institution to fail in the nation this year, and the twelfth in Illinois. The last FDIC-insured institution to be closed in the state was The First National Bank of Danville, earlier today.

2. Millennium State Bank of Texas, Dallas, TX

Millennium State Bank of Texas, Dallas, Texas, was closed today by the Texas Department of Banking, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with State Bank of Texas, Irving, Texas, to assume all of the deposits of Millennium State Bank of Texas.

As of June 30, 2009, Millennium State Bank of Texas had total assets of approximately $118 million and total deposits of $115 million. State Bank of Texas agreed to purchase essentially all of the failed banks assets.

The FDIC estimates that the cost to the Deposit Insurance Fund will be $47 million. State Bank of Texas’ acquisition of all the deposits was the “least costly” resolution for the DIF compared to alternatives. Millennium State Bank of Texas is the 51st FDIC-insured institution to fail in the nation this year and the first in Texas. The last bank to fail in the state was Sanderson State Bank, Sanderson, on December 12, 2008.

3.  First National Bank of Danville, Danville, IL

The First National Bank of Danville, Danville, Illinois, was closed today by the Office of the Comptroller of the Currency, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with First Financial Bank, N.A., Terre Haute, Indiana, to assume all of the deposits of The First National Bank of Danville.

As of April 30, 2009, The First National Bank of Danville had total assets of $166 million and total deposits of approximately $147 million. First Financial Bank, N.A. paid a premium of 5.36 percent to acquire all of the deposits of the failed bank. In addition to assuming all of the deposits of the failed bank, First Financial Bank, N.A. agreed to purchase approximately $148 million of assets. The FDIC will retain the remaining assets for later disposition.

The FDIC and First Financial Bank, N.A. entered into a loss-share transaction on approximately $97 million of The First National Bank of Danville’s assets.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $24 million. The First National Bank of Danville is the 50th FDIC-insured institution to fail in the nation this year, and the eleventh in Illinois. The last FDIC-insured institution to be closed in the state was The Elizabeth State Bank, Elizabeth, earlier today.

4.  Elizabeth State Bank, Elizabeth, IL

The Elizabeth State Bank, Elizabeth, Illinois, was closed today by the Illinois Department of Financial and Professional Regulation, Division of Banking, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Galena State Bank and Trust, Galena, Illinois, to assume all of the deposits of The Elizabeth State Bank.

As of April 30, 3009, The Elizabeth State Bank had total assets of $55.5 million and total deposits of approximately $50.4 million. Galena State Bank and Trust paid a premium of 1.0 percent to acquire all of the deposits of the failed bank. In addition to assuming all of the deposits of the failed bank, Galena State Bank and Trust agreed to purchase approximately $52.3 million of assets. The FDIC will retain the remaining assets for later disposition.

The FDIC and Galena State Bank and Trust entered into a loss-share transaction on approximately $44.5 million of The Elizabeth State Bank’s assets.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $11.2 million. The Elizabeth State Bank is the 49th FDIC-insured institution to fail in the nation this year, and the tenth in Illinois. The last FDIC-insured institution to be closed in the state was Rock River Bank, Oregon, earlier today.

5.  Rock River Bank, Oregon, IL

Rock River Bank, Oregon, Illinois, was closed today by the Illinois Department of Financial and Professional Regulation, Division of Banking, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with The Harvard State Bank, Harvard, Illinois, to assume all of the deposits of Rock River Bank.

As of April 30, 2009, Rock River Bank had total assets of $77 million and total deposits of approximately $75.8 million. The Harvard State Bank paid a premium of 2.0 percent to acquire all of the deposits of the failed bank. In addition to assuming all of the deposits of the failed bank, The Harvard State Bank agreed to purchase approximately $72.9 million of assets. The FDIC will retain the remaining assets for later disposition.

The FDIC and The Harvard State Bank entered into a loss-share transaction on approximately $51.3 million of Rock River Bank’s assets.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $27.6 million.  Rock River Bank is the 48th FDIC-insured institution to fail in the nation this year, and the ninth in Illinois. The last FDIC-insured institution to be closed in the state was The First State Bank of Winchester, earlier today.

6.  First State Bank of Winchester, Winchester, IL

The First State Bank of Winchester, Winchester, Illinois, was closed today by the Illinois Department of Financial and Professional Regulation, Division of Banking, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with The First National Bank of Beardstown, Beardstown, Illinois, to assume all of the deposits of The First State Bank of Winchester.

As of April 30, 2009, The First State Bank of Winchester had total assets of $36 million and total deposits of approximately $34 million. The First National Bank of Beardstown paid a premium of 2.0 percent to acquire all of the deposits of the failed bank. In addition to assuming all of the deposits of the failed bank, The First National Bank of Beardstown agreed to purchase approximately $33 million of assets. The FDIC will retain the remaining assets for later disposition.

The FDIC and The First National Bank of Beardstown entered into a loss-share transaction on approximately $20 million of The First State Bank of Winchester’s assets.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $6 million. The First National Bank of Beardstown’s acquisition of all the deposits was the “least costly” resolution for the FDIC’s DIF compared to alternatives. The First State Bank of Winchester is the 47th FDIC-insured institution to fail in the nation this year, and the eighth in Illinois. The last FDIC-insured institution to be closed in the state was The John Warner Bank, earlier today.

7. John Warner Bank, Clinton, IL

The John Warner Bank, Clinton, Illinois, was closed today by the Illinois Department of Financial and Professional Regulation, Division of Banking, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with State Bank of Lincoln, Lincoln, Illinois, to assume all of the deposits of The John Warner Bank.

As of April 30, 2009, The John Warner Bank had total assets of $70 million and total deposits of approximately $64 million. State Bank of Lincoln paid a premium of 4.1 percent to acquire all of the deposits of the failed bank. In addition to assuming all of the deposits of the failed bank, State Bank of Lincoln agreed to purchase approximately $63 million of assets. The FDIC will retain the remaining assets for later disposition.

The FDIC and State Bank of Lincoln entered into a loss-share transaction on approximately $31 million of The John Warner Bank’s assets.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $10 million. State Bank of Lincoln’s acquisition of all the deposits was the “least costly” resolution for the FDIC’s DIF compared to alternatives. The John Warner Bank is the 46th FDIC-insured institution to fail in the nation this year, and the seventh in Illinois. The last FDIC-insured institution to be closed in the state was Bank of Lincolnwood, Lincolnwood, on June 5, 2009.

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