This is the second Friday in a row with only one bank failure, and like last Friday, the one failed bank was in Illinois. This was the nation's 110th bank failure for 2010, and the 14th bank failure in Illinois. The failed bank, Palos Bank and Trust Company, was small with 5 branches and $493.4 million in assets.
As usual, the FDIC was able to find a buyer. First Midwest Bank will pay the FDIC a premium of 1% to assume all of the deposits of Palos Bank and Trust Company. This includes deposits over the FDIC limit and brokered deposits.
I wasn't able to find any mention at First Midwest Bank's website about if they have decided to honor existing CD rates to maturity. The FDIC Q&A just has the typical note about interest rates:
Interest on deposits accrued through close of business the day the bank was closed will be paid at your same rate. Current rates will be reviewed by the acquiring institution and may be lowered; however, you may withdraw funds from any transferred interest bearing account without early withdrawal penalty until you enter into a new deposit agreement with First Midwest Bank.
There were no credit union liquidations this week. The total number of credit union liquidations for 2010 remains at 13. The last credit union that was liquidated was Kappa Alpha Psi FCU. The credit union attempted to block the liquidation order in a U.S. District Court. US Banker has an interesting article on this case.
Below is a summary of the bank failure:
110th Bank Failure of 2010 (14th in Illinois)
- FDIC Press Release
- Closed Bank: Palos Bank and Trust Company, Palos Heights, IL
- Size: 5 branches, $493.4 million in assets, $467.8 million in deposits
- Acquiring Bank: First Midwest Bank, Itasca, IL
- Possible Uninsured Deposits: all deposit accounts, including brokered deposits, have been assumed by First Midwest Bank
- Rate Changes: Current rates will be reviewed by the acquiring institution and may be lowered
- Estimated Cost to Deposit Insurance Fund: $72.0 million
- Enforcement Action: FDIC 10/2/09 C&D Order
- Financial Ratings: 1 star (lowest) at Bankrate.com, 0 star (lowest) at BauerFinancial, 1 out of 5 at DepositAccounts.com
The above ratings are based on 3/31/2010 data.