Two Illinois banks fail, 36 for the year
Strategic Capital Bank taken over by Midland States Bank, expected to cost FDIC $173 million; Citizens National Bank taken over by Morton Community Bank, expected to cost FDIC $106 million.
NEW YORK (CNNMoney.com) -- Strategic Capital Bank and Citizens National Bank failed on Friday, bringing the total bank failures for 2009 to 36, up from 25 in all of 2008.
The failure of Strategic Capital, a Champaign, Ill.-based bank, will cost the Federal Deposit Insurance Corp.'s deposit insurance fund $173 million; Citizens National, of Macomb, Ill., will cost the FDIC $106 million.
Strategic had $471 million in deposits and $537 million in assets. Citizens National had $400 million of deposits and $437 million in assets.
Strategic's deposits were acquired by Midland States Bank of Effingham, Illinois. Midland took $536 million of Strategic's assets, leaving just $1 million for the FDIC to sell. Morton Community bank bought all but $200 million in Citizens' brokered deposits. Deposits are sought after by other banks, as they can be used to loan against. But assets include things like troubled mortgages and other housing-related products that are often not desirable in this market.
Strategic Capital Bank will reopen on Tuesday as a branch of Midland States Bank. Citizens National will reopen Saturday as Morton Community Bank.
Customers with questions can call the FDIC at 1-866-954-9527 for Strategic and 1-866-954-9529 for Citizens, or visit the Web sites at http://www.fdic.gov/bank/individual/failed/strategiccapital.html and http://www.fdic.gov/bank/individual/failed/citizensnational.html
The FDIC, which is funded by fees paid by banks, insures individual deposits up to $250,000. It is expected to lose $70 billion over the next five year covering failed banks.
This week President Obama increased the amount the FDIC can borrow from the U.S. Treasury to $100 billion from $30 billion.