State regulators shuttered the Waukegan Savings Bank in Illinois Friday appointing Federal Deposit Insurance Corp (FDIC) as receiver.
This is the first bank casualty for the month of August bringing the total number of bank failures this year to 40 in the nation.
At this time last year, there had been 63 bank failures while 109 had failed in 2010.
The state of Georgia has had the most bank failures in 2012. The total number of seizures in Georgia this year amount to nine.
Close on the heels is Illinois with six bank failures till now.
As of March 31, the two branches of the captured Waukegan Savings Bank had roughly $88.9 million in total assets and $77.5 million in total deposits.
First Midwest acquires Waukegan Saving Bank
As a part of a purchase-and-assumption transaction facilitated by the FDCI, First Midwest Bank based in Itasca has agreed to acquire the deposits and assets of Waukegan Savings Bank.
As of March 31, the two branches of the captured Waukegan Savings Bank had roughly $88.9 million in total assets and $77.5 million in total deposits. With this seizure, the total cost to the FDIC’s deposit insurance fund from the failed bank will be $19.8 million.
According to FDIC, deposits of the failed bank will be shifted to First Midwest and customers automatically transferred over to the new bank. Depositors of Waukegan can access their money by using ATM, checks or debit cards over the weekend.
Michael L. Scudder, President and Chief Executive Officer of First Midwest stated, "I want to welcome all Waukegan Savings Bank customers to First Midwest Bank and assure them that their deposits and business affairs are in strong and trusted hands."
"First Midwest is the community bank of choice for more than one quarter million families and twenty five thousand businesses in the greater Chicagoland area through our network of nearly 100 branches."
“With our complementary branch locations, business lines, and community banking values, Waukegan Savings Bank and First Midwest are a great match. We look forward to working side-by-side with our new colleagues to add to their already high level of personal service and commitment to the communities they serve."
Bank closures slow down
Closure of banks has slowly petered off after it gathered momentum during the financial crisis in 2008. In 2007, only three banks closed doors while the number jumped to 25 in 2008 after the meltdown and shot up to 140 in 2009.
In 2011, a total of 92 banks went into receivership were merged with another financial institution or shuttered completely.
Presently, about 1000 banks are in financial crisis due to mortgages, derivatives, and bad investments. Given the current situation, experts estimate the total number of closures could hit 62 in 2012.