U.S. regulators Friday seized an Illinois bank, the third in the state to fail this year.
The Federal Deposit Insurance Corp. said Friday that the sole office of the Bank of Commerce, of Wood Dale, Ill., was closed. Advantage National Bank Group, of Elk Grove Village, Ill., entered a purchase-and-assumption agreement with the FDIC to assume all of Bank of Commerce’s deposits.
It brings the total number of U.S. failures this year to 26. The number of banks that failed last year–157–was the highest since the savings-and-loan crisis ended in 1992, although the total assets at 2010’s fallen banks were much smaller than the total the year before.
Bank of Commerce had about $163.1 million in total assets and $161.4 million in total deposits as of year’s end. Advantage National Bank agreed to pay a 0.1% premium to assume all the deposits and agreed to purchase essentially all of the failed bank’s assets.
The FDIC estimates that the cost of the failure to the Deposit Insurance Fund will be $41.9 million.
Depositors of the failed bank will automatically become depositors of the new bank, and the deposits will continue to be insured by the FDIC. The FDIC insures deposits for up to $250,000 per depositor.
It might be helpful to point out the deposit insurance fund is funded by the banks themselves. No taxpayers were harmed in this failure.
The smaller, undercapitalized institutions in urban and less affluent areas are going to continue to be forced or allowed to go under when another bank steps up to ‘acquire’ them. The ‘big boys’ got rescued and the midsize regionals are weathering this situation for the time being. Pressure will continue until the economy stabilizes and starts to show verifiable, sustainable growth. When demand picks up and banks loosen their lending as producers need to borrow for expansion you will see the bank failures diminish. We are not out of the woods yet. I have faith in our system but this current bunch seems determine to do the opposite of what is needed and good for the country.
That is an interesting way of putting it, though I am not certain I concur.