The Federal Deposit Insurance Corp. or FDIC, announced Friday the shuttering of two banks, one each in Illinois and Indiana, taking the count of U.S. bank closures in 2012 to nine, after 92 in 2011 and the 157 bank closures in 2010. The closures were the first in both the states this year.
The two banks were closed on Friday by the regulators, with the assets of the failed banks beings assumed by other banks in FDIC assisted transactions. The FDIC estimates that the cost to the Deposit Insurance Fund or DIF, by the two bank closures will be a total of $51.3 million.
Wintrust Financial Corp.'s (WTFC) subsidiary Barrington Bank & Trust Co., N.A., assumed the banking operations, including all the deposits, of Charter National Bank and Trust from FDIC, and Muncie, Indiana-based First Merchants Bank, N.A., assumed from the FDIC all of the deposits of SCB Bank.
Hoffman Estates, Illinois-based Charter National Bank and Trust was closed by the Office of the Comptroller of the Currency. As of December 31, 2011, Charter had about $93.9 million in total assets and $89.5 million in total deposits.
Barrington, Illinois-based Barrington Bank agreed to purchase essentially all of Charter's assets, while assuming all of the deposits of the failed bank, and entered into a loss-share transaction with FDIC on $72.1 million of Charter's assets. Further, Shelbyville, Indiana-based SCB Bank was closed by the Office of the Comptroller of the Currency. As of December 31, 2011, SCB Bank had about $182.6 million in total assets and $171.6 million in total deposits.
First Merchants Corp.'s (FRME) subsidiary First Merchants Bank agreed to purchase essentially all of SCB Bank's assets, while assuming all of the deposits the failed bank. The FDIC noted that customers of all the failed banks can this evening and over the weekend access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed, and loan customers should continue to make their payments as usual.
Customers of the failed banks are protected, by the FDIC, which has insured bank deposits since the Great Depression, currently covering customer accounts up to $250,000. The FDIC insures deposits at the nation's 7,437 banks and savings associations.
Banks failures have continued at a relatively steady pace in early 2012, though the size and number of closures are well below levels seen during the prior three years.
On an average, 13 banks have failed per month in 2010, with bank closures for 2011 averaging only nearly eight per month, and currently averaging only six in 2012. The 92 bank closures in 2011 were down from 157 in 2010 and 140 in 2009, but nearly four times of the 25 bank failures in 2008. Only three banks failed in 2007. The highest and all time record for bank closures was in 1989 when 534 banks closed, followed by 181 bank failures in 1992.
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