Seven banks fail, pushing 2009 tally to 52

Regulators close six Illinois banks and one Texas bank, setting the FDIC back a total of $314.3 million.

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By Catherine Clifford, CNNMoney.com staff writer

Map
Where the banks are failing
Bank failures and foreclosures keep mounting
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NEW YORK (CNNMoney.com) -- Seven banks were shut down by authorities Thursday, pushing the tally of failed banks for 2009 to 52, more than doubling the failures in 2008.

Six regional banks in Illinois and one in Texas closed their doors, according to the Federal Deposit Insurance Corporation.

The rash of Illinois failures are interlinked: All six banks were controlled by one family and followed a similar business model that "created concentrated exposure in each institution," according to the FDIC.

The agency said that the six failures stemmed from the banks' investments in collateralized debt obligations and other loan losses.

Twelve banks in Illinois have failed this year. Thursday's failure in Texas was the first for the state in 2009.

Last year, 25 banks failed in the United States.

Local banks have been hard hit as plummeting home values devalued mortgage-backed assets and rising unemployment rates caused an increasing number of consumers to default on their loans.

Larger financial institutions have been helped with government bailouts, but smaller regional banks continue to struggle.

FDIC fund: The total cost of Thursday's bank failures to the FDIC is $314.3 million, bringing the FDIC fund's total cost for failed banks to $12.3 billion this year. That compares with $17.6 billion in all of 2008.

The FDIC, which is funded primarily by fees paid by banks, insures individual deposits up to $250,000. The amount was increased from $100,000 late last year in response to concerns about the stability of the nation's banks.

First bank topples: State regulators shuttered John Warner Bank, based in Clinton, Ill., and named the FDIC the receiver. The State Bank of Lincoln, based in Lincoln, Ill., will assume all of the deposits of the failed bank.

As of April 30, the failed bank had total assets of $70 million and total deposits of approximately $64 million.

The three offices of John Warner will reopen on Friday as branches of State Bank of Lincoln. Customers of the shuttered bank will automatically become depositors of State Bank of Lincoln.

Second bank falls: Later Thursday, state regulators closed First State Bank of Winchester, based in Winchester, Ill., and named the FDIC the receiver. Federal regulators entered into a purchase and assumption agreement for The First National Bank of Beardstown, based in Beardstown, Ill., to assume all of the assets and deposits of the failed bank.

As of April 30, The First State Bank of Winchester had total assets of $36 million and total deposits of approximately $34 million.

The two offices of the failed bank will reopen Monday as branches of The First National Bank of Beardstown. Customers of the failed bank will automatically be transferred over to the new bank.

Over the weekend, customers of the failed bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.

Third bank falls: Rock River Bank, based in Oregon, Ill., was shuttered by state regulators. The FDIC was named the receiver and it entered into an agreement with the The Harvard State Bank, of Harvard, Ill., to assume all of the deposits of the failed bank and almost all of the assets.

As of April 30, Rock River Bank had total assets of $77 million and total deposits of approximately $75.8 million. The Harvard State Bank agreed to purchase $72.9 million in assets and the FDIC will retain the rest to dispose of later.

The four offices of the failed bank will reopen Monday as branches of The Harvard State Bank and depositors will automatically be transferred.

Fourth bank goes down: Elizabeth State Bank, based in Elizabeth, Ill., was closed down by state regulators and the FDIC was named the receiver. Galena State Bank and Trust, based in Galena, Ill., entered into a purchase and assumption agreement to take over all of the deposits of the failed bank.

As of April 30, The Elizabeth State Bank had total assets of $55.5 million and total deposits of approximately $50.4 million. Galena State Bank and Trust purchased $52.3 million of assets and the FDIC will retain the rest to dispose of later.

The two offices of failed bank will reopen on Monday as branches of Galena State Bank and Trust. Customers will automatically be transferred over to the new bank.

Number five: The First National Bank of Danville, headquartered in Danville, Ill., was shuttered by the Office of the Comptroller of the Currency and the FDIC was named the receiver. First Financial Bank, N.A., based in Terre Haute, Ind., entered into a purchase and assumption agreement to take over all of the deposits of the failed bank.

As of April 30, the failed bank had total assets of $166 million and total deposits of approximately $147 million. First Financial Bank, N.A. agreed to purchase $148 million of assets, leaving the remainder for the FDIC to dispose of later.

The seven offices of failed bank will reopen on Monday as branches of First Financial Bank, N.A. and depositors will automatically be transferred over to the new bank.

Number 6: State regulators shut down the Millennium State Bank of Texas, based in Dallas, Texas, Thursday and named the FDIC the receiver. The FDIC entered into a purchase and assumption agreement with an Irving, Texas bank, called the State Bank of Texas.

As of June 30, Millennium State Bank of Texas had total assets of approximately $118 million and total deposits of $115 million. State Bank of Texas will take over all of the deposits and "essentially all of the failed banks assets," according to the release.

The one office of Millennium State Bank of Texas will be open Monday as a branch of State Bank of Texas. Depositors of the failed bank will automatically be transferred over to the new bank.

The biggest to fall: State regulators shut down Founders Bank, based in Worth, Ill., and named the FDIC the receiver. The PrivateBank and Trust Company, head-quartered in Chicago, Ill., entered into a purchase and assumption agreement to take over the assets of the failed bank.

As of April 30, Founders Bank had total assets of $962.5 million and total deposits of $848.9 million. The PrivateBank and Trust Company purchased all of the deposits of the failed bank and $888.4 million worth of assets, leaving the rest for the FDIC to dispose of later.

The eleven offices of the failed bank will reopen on Monday as branches of The PrivateBank and Trust Company. Customers will automatically be transferred over to the new bank.  To top of page

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