Bank Closure Friday

These two bank closures follow the early morning announcement that Florida's largest bank, BankUnited was siezed by regulators. Expect the pace of bank closures (and the cost to FDIC's insurance fund) to accelarate.-Lou


Two Illinois banks fail, bringing year's total to 36

SAN FRANCISCO (MarketWatch) -- Champaign, Ill.-based Strategic Capital Bank and Macomb, Ill.-based Citizens National Bank were closed by regulators Friday, bringing the total number of bank failures for 2009 to 36, according to the Federal Deposit Insurance Corp.

Strategic Capital had $471 million in deposits and $537 million in assets as of May 13, according to the FDIC. Effingham, Ill.-based Midland States Bank has agreed to assume the failed bank's deposits, the FDIC said.

Midland States has also agreed to acquire about $536 million worth of Strategic Capital's assets.

The FDIC said Strategic Capital's failure should cost its deposit insurance fund $173 million.

The FDIC voted Friday to charge an emergency fee to U.S. banks, in an effort to replenish the deposit insurance fund amid the ongoing credit crisis.

Macomb's Citizens National Bank marked the second Illinois closure announced on Friday, and the fifth in that state so far this year.
Morton, Ill.-based Morton Community Bank has agreed to assume Citizens National's deposits, the FDIC said. Citizens National had roughly $400 million in deposits as of May 13, and $437 million in assets, the FDIC said.

The FDIC estimated that the failure of Citizens National will cost its insurance deposit fund $106 million.

Also on Friday, BankUnited Financial Corp said it had filed for Ch. 11 bankruptcy protection. BankUnited Financial is the former holding company for BankUnited FSB, the largest lender based in Florida, which was closed Thursday and placed in receivership.

The company said that it is unlikely it will be entitled to any distribution from the FDIC given the bank's financial condition.