Regulators shutter small banks in Illinois and Minnesota

NEW YORK (CNNMoney.com) -- Two small banks failed Friday night, making them the second and third banks to close in 2010.

Regulators shuttered Town Community Bank and Trust in Antioch, Ill., and St. Stephen State Bank in St. Stephen, Minn.

• Facebook
• Digg
• Twitter
• Buzz Up!
• Email
• Print
• Comment on this story

Map

Where the banks are failing

Bank failures and foreclosures keep mounting

View map

DID YOUR BANK FAIL?

• For more information visit www.fdic.gov
• Don’t panic – your savings are insured
• Keep paying your loans – the terms remain the same.
• The FDIC will notify you by mail about your accounts/loans.
• Contact the FDIC with any questions until further notice
• If your bank is purchased, you will be contacted by your new bank.

Customers of both banks are protected, however. The Federal Deposit Insurance Corporation, which has insured bank deposits since the Great Depression, currently covers accounts up to $250,000.

First American Bank in Elk Grove Village, Ill., will assume the failed bank's $67.4 million in deposits and will purchase the Town Community Bank and Trust's $67.6 million of $69.6 million in assets. The bank entered into a share-loss agreement with the FDIC on $56.2 million of the failed bank's assets. The FDIC said it will retain the remaining assets for later disposition.

The single branch of Town Community Bank and Trust will reopen as a branch of First American Bank.

First State Bank of St. Joseph in St. Joseph, Minn., will assume all of the St. Stephen State Bank's $23.4 million in deposits and "essentially all" of the failed bank's $24.7 million in assets. First State Bank of St. Joseph entered into a share-loss agreement with the FDIC on $20.4 million of the St. Stephen State Bank's assets.

The two branches of St. Stephen State Bank will reopen as branches of First State Bank of St. Joseph.

Friday's closures will cost the FDIC approximately $25 million.

Customers of the failed banks can access their money over the weekend by writing checks or using ATMs or debit cards. Checks will continue to be processed, and borrowers should make mortgage and loan payments as usual.

The FDIC also said customers should continue to use their existing branch until they receive notice that the takeover has been completed.

A total of 140 banks failed in 2009, the highest since 1992, when 181 banks failed. But that count is far from 1989's record high of 534 closures which took place during the savings and loan crisis.

Last year's spike has raised concerns about the federal deposit insurance fund, which has slipped into the red for the first time since 1991.

The fund was $8.2 billion in the hole as of the end of September. But that includes $21.7 billion the agency has earmarked for future bank failures.