Premier Bank, Wilmette, IL, Closed by Regulators, 15th Banking Failure of 2012

Troubled Premier Bank of Wilmette, IL, was closed today by state regulators.  The FDIC, named as receiver, sold the failed bank to International Bank of Chicago, Chicago, IL, which will assume all deposits of failed Premier Bank.

Premier’s two branches will reopen Saturday as branches of International Bank and all Premier depositors will automatically become depositors of International Bank.  FDIC deposit insurance coverage will continue on all deposits of Premier Bank up to the applicable FDIC limits.  Over the weekend, Premier depositors will continue to have access to their money through the use of debit cards, ATMs and checking accounts.

Premier Bank has been a problem bank for years.  In September 2010, the Bank signed an FDIC consent order which detailed the “unsafe or unsound banking practices and violations of law, rule or regulation alleged to have been committed by the Bank.”  Premier was unable to comply with the demands of the Consent Order or raise additional capital and regulators had no choice other than to close the insolvent bank.

Loan defaults had been increasing steadily since 2010 and at the end of last year, Premier had a troubled asset ratio of 355%.  Almost without exception, once a bank’s troubled asset ratio exceeds 100%, failure is a virtual certainty.

Premier Bank was established in February 2000 and provided banking services to both individual and commercial customers.  According to the Bank’s website;

Premier Bank prides itself on providing the highest level of service to each and every customer. The Bank is dedicated to meeting all the banking needs of the community from savings accounts for children to financing multi-million dollar real estate and business ventures. The multi-lingual staff of the Loan Department at Premier specializes in financing for franchises, commercial real estate developments and nursing care facilities.

We believe diversity is one of our biggest strengths and that it places us in the unique position of understanding the needs of a wide range of customers.

At December 31, 2011, Premier Bank had total assets of $268.7 million and total deposits of $199.0 million.

International Bank agreed to purchase all of Premier Bank’s assets in addition to assuming all of the failed bank’s deposits.  International Bank had previously acquired another failed bank, All American Bank, on October 28, 2011.  International Bank of Chicago had total assets of $290 at December 31, 2011 and has been profitable for the past two years.

The estimated loss to the FDIC Deposit Insurance Fund (DIF) for the failure of Premier Bank is $64.1 million.  Premier Bank became the nation’s 15th banking failure of 2012 and the third in Illinois.