Saturday, August 7, 2010

Chicago Bank Fails, 2010 Tally Hits 109

TheStreet.com


Philip van Doorn
08/07/10 - 12:31 PM EDT

CHICAGO (TheStreet) -- After four consecutive weeks of multiple bank failures, regulators closed just one institution Friday, bringing the total number of U.S. bank failures in 2010 to 109.

The Illinois Department of Financial and Professional Regulation took over Ravenswood Bank of Chicago and appointed the Federal Deposit Insurance Corp. receiver. Ravenswood Bank had two offices and $265 million in total assets.

The failed bank had been included in TheStreet's Bank Watch List of undercapitalized institutions, based on first-quarter regulatory data provided by SNL Financial. By June 30, Ravenswood Bank's capital had been completely wiped out by a $14.4 million second-quarter net loss.

TheStreet will publish a new bank watch list based on preliminary regulatory filings for June 30 in the coming week.

The FDIC sold the failed bank's $270 million in deposits for a 0.90% premium to Northbrook Bank and Trust Company of Northbrook, Ill., which also took on Ravenswood Bank's assets. The FDIC agreed to cover 80% of losses on $161 million of the acquired assets.

The failed bank's offices were set to reopen as Northbrook branches on Saturday. The FDIC estimated the cost of the bank's failure to the deposit insurance fund would be $68.1 million.

Northbrook Bank and Trust Company is a subsidiary of Wintrust Financial Corporation (WTFC). This was Wintrust's third failed bank acquisition this year. The others were Lincoln Park Savings Bank of Chicago, which also was acquired by Northbrook Bank and Trust; and Wheatland Bank of Naperville, Ill., which was purchased by Wheaton Bank and Trust of Wheaton, Ill. Both of those bank closures took place on April 23, when sevenIllinois banks failed.

Ongoing Bank Failure Coverage

There have now been 13 bank closures in Illinois this year, making the state second only to Florida, which has had 20 banks shuttered by regulators. Since the beginning of 2008 there have been 35 failures in Illinois. Only Georgia (with 41 failures) and Florida (with 36) have had more.

The largest Illinois failure during this credit cycle was Corus Bank of Chicago, which had $7 billion when it was closed by the Office of the Comptroller of the Currency last September. Its deposits and branches were sold to MB Financial (MBFI).

The second-largest Illinois bank closure during the crisis was Park National Bank of Chicago, which was acquired by U.S. Bancorp (MBFI).

Please click here for a review of last week's bank failures.

All previous bank and thrift failures since the beginning of 2008 are detailed in TheStreet's interactive bank failure map:

chart

The bank failure map is color-coded, with the states having the greatest number of failures highlighted in red, and states with no failures in gray. By moving your mouse over a state you can see its combined 2008-2010 totals. Clicking on a state will open a detailed map pinpointing the locations of each failure and providing additional information about each one.

-- Written by Philip van Doorn in Jupiter, Fla.