Dedicated to Deposits: Deals, Data, and Discussion

7 Illinois Banks Fail Including Amcore & Broadway Bank

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All of Friday's bank failures occurred in Illinois with four in Chicago. For the year, that brings the national total number of failures to 57 and the total number of failures in Illinois to 10. The two largest banks that failed were Amcore Core Bank with $3.4 billion in deposits and Broadway Bank with $1.1 billion in deposits. This Chicago Tribune article has some interesting history of Broadway Bank:

Giannoulias worked for his father at Chicago-based Broadway before entering politics, and the bank's struggles in recent years with real estate loans gone bad have weighed on Giannoulias' Democratic bid for Barack Obama's old Senate seat.

The FDIC was able to find buyers for all 7 banks, and all regular deposits were assumed by the acquiring banks. The Canadian-owned Harris Bank assumed all deposits of Amcore Bank. MB Financial assumed all deposits of Broadway Bank.

For all 7 closures, the FDIC didn't provide any indication on whether the acquiring banks will keep existing CD rates the same. For all cases the FDIC had the following in its FAQs:

[The bank] will review rates and notify you if interest rates will change. Your interest rate may be reduced.

MB Financial doesn't have a good record on this. When it acquired Corus Bank last year, many former Corus customers had their Corus CDs closed by MB Financial.

Update 4/24/10: Wheaton Bank & Trust and Northbrook Bank and Trust Company state on their websites that they will honor the existing CD rates. Both have the following FAQ:

Will my Certificate of Deposit (CD) change? Will the rate change prior to maturity? No. Any existing CDs will remain the same. The rate and maturity terms do not change.

There were no credit union closures this week. However, one credit union was placed into a NCUA conservatorship. According to the NCUA press release

The National Credit Union Administration (NCUA) today assumed control of the operations of St. Paul Croatian Federal Credit Union, a federally chartered and federally insured credit union headquartered in Eastlake, Ohio.

The credit union has approximately $238.8 million in assets and almost 5,400 members.

Finally, all 7 of these failed banks were operating under public enforcement actions. Calculated Risk Blog has updated its unofficial problem bank table which lists all banks that are operating under some type of public enforcement action. The table now has 694 banks.

Below is a summary of today's bank failures:

51st Bank Failure of 2010 (4th in IL)

  • FDIC Press Release
  • Closed Bank: Amcore Bank, N.A., Rockford, IL
  • Size: 58 branch, $3.8 billion in assets, $3.4 billion in deposits
  • Possible Uninsured Deposits: All deposits transferred, excluding the Cede & Co. brokered deposits
  • Acquiring Bank: Harris N.A, Chicago, IL
  • Rate Changes: Harris N.A. will review rates
  • Estimated Cost to Deposit Insurance Fund: $220.3 million
  • Enforcement Action: 6/25/09 OCC Consent Order
  • Financial Ratings: 1 star (lowest) at Bankrate.com, 0 star (lowest) at BauerFinancial

52nd Bank Failure of 2010 (5th in IL)

  • FDIC Press Release
  • Closed Bank: Broadway Bank, Chicago, IL
  • Size: 4 branches, $1.2 billion in assets, $1.1 billion in deposits
  • Possible Uninsured Deposits: All deposits transferred, excluding the Cede & Co. brokered deposits
  • Acquiring Bank: MB Financial Bank, N.A., Chicago, IL
  • Rate Changes: MB Financial Bank, N.A. will review rates
  • Estimated Cost to Deposit Insurance Fund: $394.3 million
  • Enforcement Action: 2/26/10 FDIC Consent Order
  • Financial Ratings: 1 star (lowest) at Bankrate.com, 0 star (lowest) at BauerFinancial

53rd Bank Failure of 2010 (6th in IL)

  • FDIC Press Release
  • Closed Bank: Citizens Bank & Trust Company of Chicago
  • Size: 1 branch, $77.3 million in assets, $74.5 million in deposits
  • Possible Uninsured Deposits: All deposits transferred
  • Acquiring Bank: Republic Bank of Chicago
  • Rate Changes: Republic Bank of Chicago will review rates
  • Estimated Cost to Deposit Insurance Fund: $20.9 million
  • Enforcement Action: 9/29/09 FDIC Cease and Desist Order
  • Financial Ratings: 1 star (lowest) at Bankrate.com, 0 star (lowest) at BauerFinancial

54th Bank Failure of 2010 (7th in IL)

  • FDIC Press Release
  • Closed Bank: New Century Bank, Chicago, IL
  • Size: 3 branches, $485.6 million in assets, $492.0 million in deposits
  • Possible Uninsured Deposits: All deposits transferred
  • Acquiring Bank: MB Financial Bank, N.A., Chicago, IL
  • Rate Changes: MB Financial Bank, N.A. will review rates
  • Estimated Cost to Deposit Insurance Fund: $125.3 million
  • Enforcement Action: 2/19/10 FDIC Consent Order
  • Financial Ratings: 1 star (lowest) at Bankrate.com, 0 star (lowest) at BauerFinancial

55th Bank Failure of 2010 (8th in IL)

  • FDIC Press Release
  • Closed Bank: Lincoln Park Savings Bank, Chicago, IL
  • Size: 4 branches, $199.9 million in assets, $171.5 million in deposits
  • Possible Uninsured Deposits: All deposits transferred
  • Acquiring Bank: Northbrook Bank and Trust Company, Northbrook, IL
  • Rate Changes: All existing CDs will remain the same (per bank's FAQ)
  • Estimated Cost to Deposit Insurance Fund: $48.4 million
  • Enforcement Action: 10/06/09 FDIC Cease and Desist Order
  • Financial Ratings: 1 star (lowest) at Bankrate.com, 0 star (lowest) at BauerFinancial

56th Bank Failure of 2010 (9th in IL)

  • FDIC Press Release
  • Closed Bank: Peotone Bank and Trust Company, Peotone, IL
  • Size: 2 branches, $130.2 million in assets, $127.0 million in deposits
  • Possible Uninsured Deposits: All deposits transferred, excluding the Cede & Co. brokered deposits
  • Acquiring Bank: First Midwest Bank, Itasca, IL
  • Rate Changes: First Midwest Bank will review rates
  • Estimated Cost to Deposit Insurance Fund: $31.7 million
  • Enforcement Action: 10/09/09 FDIC Cease and Desist Order
  • Financial Ratings: 1 star (lowest) at Bankrate.com, 0 star (lowest) at BauerFinancial

57th Bank Failure of 2010 (10th in IL)

  • FDIC Press Release
  • Closed Bank: Wheatland Bank, Naperville, IL
  • Size: 1 branch, $437.2 million in assets, $438.5 million in deposits
  • Possible Uninsured Deposits: All deposits transferred, excluding the Cede & Co. brokered deposits
  • Acquiring Bank: Wheaton Bank & Trust, Wheaton, IL
  • Rate Changes: All existing CDs will remain the same (per bank's FAQ)
  • Estimated Cost to Deposit Insurance Fund: $133.0 million
  • Enforcement Action: 12/21/09 FDIC Consent Order
  • Financial Ratings: 1 star (lowest) at Bankrate.com, 0 star (lowest) at BauerFinancial

The above Bankrate ratings are based on 9/30/09 data. BauerFinancial Ratings are based on 12/31/09 data.

References:



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Comments
8 Comments.
Comment #1 by Anonymous posted on
Anonymous
According to the web pages for Wheaton Bank and Northbrook Bank, they will honor the rates and terms of the CD's issued by the Wheatland Bank and Lincoln Park Savings Bank.  MB Financial's web page said they had made no decision yet, but as you said, MB does not have a good track record in this area.

3
Comment #2 by KenBDG posted on
KenBDG
Thanks for info. I've updated the post. Glad to see some banks honoring existing CD rates.

2
Comment #4 by AnY MOUSE (anonymous) posted on
AnY MOUSE
NICE TO SEE GEORGIA NOT NUMERO UNO ANYMORE

-2
Comment #5 by Biff (anonymous) posted on
Biff
Wheaton Bank and Northbrook Bank are both owned by Wintrust, so that makes sense.

2
Comment #6 by Anonymous posted on
Anonymous
We had a hat trick this week.  Three CDs in three failed banks.  We're living in strange times.

0
Comment #7 by Anonymous posted on
Anonymous
As of Monday April 26, 2010 morning, the Harris Bank FAQ regarding Amcore states this:

Q12.What will happen to the rates on my fixed rate CD accounts?

All existing retail customer CDs will continue to be honored at their existing rate and terms. I found this answer by going to Harris Bank website (www.harrisbank.com) and searching for Amcore in the search box.  The second (as of this morning) link was for Frequently Asked Questions.

I'm glad my Amcore CD wasn't taken over by MBF.

1
Comment #8 by Anonymous posted on
Anonymous
I live in a northwest suburb of Chicago, the week of the Sept 2010 corus takeover by MBF they sent a letter stating they would close my CD & mail a check, then they sent a second letter & said this was a mistake. Two months later, with no notice, I received a CD close out check in one envelope & another with a letter stating the CD was closed out even though it was maturing in about 30 days. There's no predicting what the new bank will do.

1
Comment #9 by Anonymous posted on
Anonymous
MB stinks!  I still don't know what will happen to my Broadway Bank CDs.  Long live Northbrook Bank who had the decency to keep the rate/terms the same even though they were quite high.  Northbrook Bank will have my lifetime loyalty.

1