North Milwaukee State Bank, WI, First Bank Failure of 2016

The first bank failure of 2016 occurred today when regulators closed a small bank in Wisconsin.  It has been almost six months since the last banking failure in the U.S.  The last FDIC insured bank failure occurred on October 2, 2015 when regulators closed Hometown National Bank, Longview, WA.

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North Milwaukee State Bank, Milwaukee, Wisconsin, was deemed insolvent and closed by state regulators on March 11, 2016 . The FDIC, after being named as receiver sold the failed bank to First-Citizens Bank & Trust Company, Raleigh, North Carolina.  Under the purchase and assumption agreement with the FDIC, Citizens Bank & Trust agreed to assume all deposits (excluding certain brokered deposits) and to purchase all of the failed bank’s assets.

North Milwaukee State Bank had been around for about 45 years since being established on February 12, 1971.  Anyone visiting the bank’s website probably got the impression that North Milwaukee was profitable and had a bright future.

NMSBank is committed to providing financial solutions by offering a range of competitive products and services to both personal and business customers.

Our Vision To be recognized as a world class financial institution by offering a comprehensive suite of products to meet the needs of our customers.

Our Mission To become one of Wisconsin’s most profitable, competitive, innovative, and customer focused financial institutions dedicated to providing to the community, financial products and services which will help our customers achieve their financial goals.

The irony here is so delicious the website should post a calorie count – the bank that couldn’t shoot straight and went belly up was going to help their customers achieve financial wealth and independence.  Did management ever read their own website?

Nonetheless, none of the depositors of North Milwaukee will incur any financial losses since deposits are covered by the FDIC up to applicable limits and the deposit insurance coverage continues uninterrupted as First-Citizens takes over.  All depositors of North Milwaukee automatically become depositors of First-Citizens and can continue to use checking, ATM services, and debit cards over the weekend to withdraw cash and for other normal banking transactions.  Both branches of North Milwaukee will reopen as branches of Citizens Bank & Trust.

As of December 31, 2015, total assets of North Milwaukee State Bank amounted to only $67.1 million and total deposits were $61.5 million.


The cost to the FDIC Deposit Insurance Fund (DIF) is estimated at $9.6 million which essentially means that almost 15 percent of the banks assets were worthless.  The FDIC has determined that the least costly method of dealing with bank failures is to sell the failed bank to another institution.

North Milwaukee State Bank becomes the first banking failure in the nation this year. The last bank to fail in Wisconsin was the Bank of Wausau, Wausau, WI, which was closed on August 9, 2013.

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