FirstMerit, the Akron-based bank that has become a Top 20 player in the Chicago area through three recent acquisitions, said it expects the pace of Illinois bank failures to pick up again.

In 2009, 21 Illinois banks failed. So far in 2010, 16 have failed, of which 12 collapsed in the first half of the year.

But FirstMerit Chief Executive Paul Greig noted Tuesday at the Stifel Nicolaus Bank & Thrift Conference in New York that the Federal Deposit Insurance Corp. so far has hired only 400 of the 500 staffers planned for its satellite office in Schaumburg.

According to SNL Financial, which covered the event and wrote about Greig’s remarks on Wednesday, Greig said that once the staff is in place, they should begin to deal with the large number of seriously troubled banks in the Chicago area.

As of Sept. 30, 68 Chicago-area banks had Texas ratios over 75 percent, according to SNL data, and 50 banks had Texas ratios over 100 percent, a threshold at which banks tend to fail.

The Texas ratio tallies up a bank’s severely past-due loans and foreclosed real estate and compares them with the bank’s core capital, typically shareholders’ equity, and money set aside for potential loan losses.

In May, FirstMerit bought mid-sized failed bank Midwest Bank in a deal brokered by the FDIC. Earlier this year, FirstMerit bought 24 branches in the Chicago area from Missouri-based First Bank. It also bought the failed George Washington Savings Bank in another FDIC-assisted deal.
Greig said a number of banks on the outskirts on Chicago “are really harmed,” having financed residential construction and commercial real estate projects that he believes could take half the decade to work through, SNL Financial reported him as saying.