Failed Bank: Bank of Lincolnwood, Lincolnwood, Illinois
There was one more failed bank this week on June 5 – Bank of Lincolnwood, Lincolnwood, IL. The last two banking failures occurred on May 22, 2009. There have now been 12 more banking failures in 2009 than occurred for all of 2008. The FDIC closure of the Bank of Lincolnwood brings banking failures for 2009 to 37 banks. The FDIC estimates that the latest banking failure will cost the FDIC Deposit Insurance Fund (DIF) $83 million. This is the sixth failed bank this year in Illinois.
1, Bankof Lincolnwood, Lincolnwood, Illinois. To protect depositors, the FDIC entered into a purchase and assumption agreement with Republic Bank of Chicago, Oak Brook, Illinois, to assume all of the deposits of Lincolnwood.
Bank of Lincolnwood had only two offices and they will both reopen as branches of Republic Bank of Chicago on June 6, 2009. All depositors of the failed Bank of Lincolnwood will automatically become depositors of Republic Bank of Chicago.
There will be no disruption of banking services, since depositors of Bank of Lincolnwood can access all funds by writing checks or using their ATM or debit cards and all checks will continue to be processed.
The Bank of Lincolnwood, as of May 26, 2009, had total assets of $214 million and total deposits of $202 million. Approximately $162 million of Bank of Lincolnwood assets will be purchased by Republic Bank and the FDIC will retain the balance of assets for later disposition.
The cost to the FDIC DIF for closing Bank of Lincolnwood is estimated at $83 million. Allowing Republic Bank to acquire all of Bank of Lincolnwood’s deposits was deemed to be the “least costly” method of resolution.
This latest banking failure was relatively small. The FDIC has 305 banks on its Problem Bank List with total assets of $220 billion. The assets of Lincolnwood represent less than one tenth of a percent of the total assets on the Problem Bank List.