First Choice Bank, Geneva, Illinois, was closed by State regulators who appointed the FDIC as receiver. The FDIC sold the failed bank to Inland Bank & Trust, Oak Brook, IL, which will assume all the deposits of the failed bank.
First Choice Bank, a community bank with $141 million in assets was founded at the dawn of the real estate boom in 2001 and proceeded to do what banks do. First Choice rapidly expanded its loan portfolio and from a zero start grew to almost $200 million in assets at the peak of the real estate bubble in 2008.
A defaulting loan portfolio quickly caused the Bank’s troubled assets to swell to $22 million by March of 2011. On July 29, 2010, First Choice signed a consent order issued by the FDIC and state regulators which cited numerous deficiencies in the Bank’s operating policies and financial controls. The Bank was unable to cure the deficiencies or raise additional capital and regulators were forced to close the Bank.
At June 30, 2011, First Choice had total assets of $141 million and total deposits of $137.2 million. Inland Bank & Trust agreed to purchase all of the failed bank’s assets as well as assume all of the bank’s deposits.
The sole branch of First Choice will become a branch of Inland Bank when it reopens on Saturday. Depositors will have full access to their money over the weekend through the use of checks, debit cards and ATMs.
The parent company of Inland Bank & Trust is Inland Bancorp, Inc which has over $1.1 billion in assets.
The failure of First Choice will result in a loss to the FDIC of $31 million. First Choice is the nation’s 68th banking failure and the 7th in Illinois.