Heartland to take over Western Springs bank

By Dow Jones Newswires
Posted April 8 at 7:27 p.m.

U.S. regulators announced the failure of an Illinois bank Friday, the fourth in that state to be shuttered this year.

The Federal Deposit Insurance Corp. said the two branches of Western Springs National Bank and Trust were closed. Heartland Bank and Trust Co., which has banks in Illinois and Missouri, agreed to assume the deposits of Western Springs as part of a purchase and assumption agreement.

The latest closure brings the total number of failures this year to 27. The pace of closures this year dropped off in March, when only three banks failed. Western Springs is the first failure in April.

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 in 2009.

Western Springs had about $186.8 million in total assets and $181.9 million in total deposits as of the end of last year. Heartland agreed to buy essentially all the failed bank’s assets, and it entered a loss-share deal on $100.8 of Western Springs commercial loans.

Depositors of the failed bank will automatically become depositors of the new bank, and deposits will continue to be insured by the FDIC. The FDIC insures deposits for up to $250,000 per depositor.

The FDIC estimated the cost of the failure to the Deposit Insurance Fund will be $31 million.

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