Two more banks crumbled in the US this weekend with the Federal Deposit Insurance Corporation (FDIC) taking charge of the Citizens National Bank, Macomb, Illinois, and Strategic Capital Bank, Champaign, Illinois.
With these two, the number of FDIC-insured institution to fail in the nation this year has reached a whopping 36, and the fifth in Illinois.
To protect the depositors of Citizens, the FDIC entered into a purchase and assumption agreement with Morton Community Bank, Morton, Illinois, to assume all the deposits of Citizens, excluding those from brokers.
Citizens will now reopen as branches of Morton Community Bank. Depositors of Citizens National Bank will automatically become depositors of Morton Community Bank, FDIC said in a release.
As of 13 May 2009, Citizens had total assets of $437 million and total deposits of approximately $400 million. Morton Community Bank agreed to purchase approximately $240 million of assets. The FDIC will retain the remaining assets for later disposition.
Morton Community Bank will purchase all deposits, except about $200 million in brokered deposits, held by Citizens. The FDIC will pay the brokers directly for the amount of their funds. Customers who place money with brokers should contact them directly for more information about the status of their deposits.
The FDIC and Morton Community Bank entered into a loss-share transaction on approximately $200 million of Citizens National Bank's assets. Morton Community Bank will share in the losses on the asset pools covered under the loss-share agreement.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $106 million.
In the case of Strategic Capital Bank, the FDIC has entered into a purchase and assumption agreement with Midland States Bank, Effingham, Illinois.
From 26 May onwards, Strategic Capital will run as a branch of Midland States Bank, FDIC said.
As of 13 May 2009, Strategic Capital had total assets of $537 million and total deposits of approximately $471 million.
In addition to assuming all of the deposits of the failed bank, Midland States Bank agreed to purchase approximately $536 million of assets. The FDIC will retain the remaining assets for later disposition.
The FDIC and Midland States Bank entered into a loss-share transaction on approximately $420 million of Strategic Capital's assets. Midland States Bank will share in the losses on the asset pools covered under the loss-share agreement.
The FDIC estimates that the cost to the DIF in Strategic Bank's case will be $173 million.