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Midwest Bank fails; FirstMerit to take over

By Becky Yerak | Midwest Bank, a $3.2 billion-asset lender that was among the first community banks to receive federal bailout funds, was seized by U.S. banking regulators Friday after failing to raise the capital it needed to stay independent.

Its assets, deposits and branches will be taken over by Akron, Ohio-based FirstMerit. The failure of Midwest Bank, which is part of publicly traded Midwest Banc Holdings of Melrose Park, is expected to cost the Federal Deposit Insurance Corp., which is financed by insurance premiums paid by banks, $216.4 million.

It’s the 11th Illinois bank failure in 2010; in 2009, the state saw 21 banks collapse. On Thursday the Tribune reported that FirstMerit was the frontrunner in the bidding.

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