The Illinois Department of Financial and Professional Regulation made an unannounced visit today at the First United Bank, Crete, Illinois. State regulators shuttered the Bank after determining that it was insolvent and appointed the FDIC as receiver. To protect depositors, the FDIC sold the failed bank to Old Plank Trail Community Bank, N.A., New Lenox, IL, which will assume all of the deposits of First United Bank.
First United Bank was a locally owned and operated bank with five branches in the Southern suburbs of Chicago. The Bank had been in business for over 40 years and at the time of closing had well over a quarter of a billion dollars in assets and deposits.
All five branches of First United Bank will reopen as branches of Old Plank Trail and depositors will have uninterrupted deposit insurance coverage up to the applicable limits. Over the weekend, depositors of First United Bank will have full access to their money through the use of debit cards, ATMs and checking accounts.
Old Plank Trail Community Bank agreed to pay the FDIC a premium of 0.6% on all deposits assumed and also agreed to purchase all of the failed Bank’s assets. Potential losses on the purchase of the failed Bank’s assets will be limited due to a loss-share transaction entered into between the FDIC and Old Plank Community Bank which covers $172.7 million of the asset pool acquired. According to the FDIC, the use of loss-share agreements limits the ultimate amount of losses on failed bank assets by keeping them in the private sector and minimizing disruptions to loan customers.
At June 30, 2012, First United Bank had total assets of $328.4 million and total deposits of $316.9 million. The cost to the FDIC Deposit Insurance Fund for the failure of First United Bank is estimated at $48.6 million.
First United Bank becomes the 43rd banking failure of the year and the seventh in Illinois. The number and size of bank failures has been declining over the past four years. During 2009, a total of 140 banks failed compared to 157 in 2010 and 92 during 2011.
The cost to the FDIC Deposit Insurance Fund for the 43 banking failures this year amounts to $2.2 billion. The 43 failed banks had total assets of almost $10 billion. By comparison, the 92 bank failures that occurred during 2011 cost the FDIC Deposit Insurance Fund $7.2 billion and total assets of the failed banks amounted to $36.0 billion.