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Seven Illinois Banks Fail and Why

 

Seven Illinois Banks were closed last week on the end of Friday by the FDIC, four in Chicago, estimated to cost $973.4 million to the insurance fund. The total failures this year is 57, ten in Illinois.
 

Amcore Bank, National Association, Rockford, Illinois was closed with Harris National Association, Chicago, Illinois, to assume all of the deposits. This is a large bank with 58 branches founded September 17, 1931. Most branches were in Winnebago County (41); Kane County (6), Cook County (5), Dupage County (5), McHenry County (4) Lake, and in the State of Wisconsin: Dane County (9), County (3), Saulk County (3), Green and Milwaukee (1 each).

From December 30, 2008 Amcore had gone from 1,266 full-time employees to 838; bank equity had dropped from $311.1 million to $97.3 million, losing $90,5 million in 2008 to losing $213.1 million in 2009 ($145.7 million in real estate: $101,030 million construction and land development,.55 million secured by farm land, $11.4 secured by 1-4 residential property, $3.8 multi-family property, $28.8 secured by nonfarm nonresidential property. In addition $22.4 million in commercial and industrial loans, $14.8 million in loans to individuals. Tier 1 risk-based capital ratio: 3.94%.

As of December 31, 2009, Amcore Bank, National Association had approximately $3.8 billion in total assets and $3.4 billion in total deposits.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $220.3 million.
http://www.fdic.gov/news/news/press/2010/pr10084.html
 

Broadway Bank, Chicago, Illinois, was closed with MB Financial Bank, National Association, Chicago, Illinois, to assume all of the deposits.

The bank had four branches in Chicago itself and 59 full time employees. Founded in May 7, 1979, the end of year net equity in 2008 was $75.2, but dropped to $30.27 million 2009. The bank lost $13.3 million in 2008 and $75.3 million in 2009 ($33.9 million construction and land development, $185,000 secured by farm land, $5.3 in 1-4 family residential property, $6.7 multifamily, $10.2 nonfarm nonresidential property. $693,000 commercial and industrial loans, $569,000 other loans; a total charge off of $57.67 million. Tier 1 risk-based capital ratio: 3.27%

As of December 31, 2009, Broadway Bank had approximately $1.2 billion in total assets and $1.1 billion in total deposits.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $394.3 million.
http://www.fdic.gov/news/news/press/2010/pr10085.html
 

The four branches of Lincoln Park Savings Bank, Chicago, Illinois, were closed with Northbrook Bank and Trust Company, Northbrook, Illinois, to assume all of the deposits As of December 31, 2009, Lincoln Park Savings Bank had approximately $199.9 million in total assets and $171.5 million in total deposits.

Founded January 1, 1946 by James Kane Sr., the Kane family had remained in charge for three generations, with the elder grandson James Kane III its president and CEO and his brother Edward Kane, the Chief Lending Office. In an effort to keep the family bank open, Lincoln Park went from 64 full time employees in 2008 to 75 full time employees in 2009. The net equity decreased from $12.8 in year-end 2008 to $7.7 million in 2009 after losing $7.5 million in 2008 and $9.2 million in 2009 (total charges off were $4.8 million with $3.8 million construction and land development, $446,000 secured by multi-family residential property, $346,000 by 1-4 family residential property, $183,000 to individuals, $103,000 credit cards).Tier 1 risk-based capital ratio 2.43%. Core capital (leverage) ratio 1.67% .

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $48.4 million.
http://www.fdic.gov/news/news/press/2010/pr10088.html
 

The sole branch of Wheatland Bank, Naperville, Illinois was closed with Wheaton Bank & Trust, Wheaton, Illinois to assume all the deposits. As of December 31, 2009, Wheatland Bank had approximately $437.2 million in total assets and $438.5 million in total deposits. Wheaton Bank & Trust will pay the FDIC a premium of 0.4 percent to assume all of the deposits of Wheatland Bank.

In December, 2009, the bank sued its former CEO claiming he had been making loans to substandard borrowers, specially claiming he was personally profiting because these substandard clients were from another lender the he owned money. Sykes founded the bank with a group of friends in 2006 and the bank was founded February 5, 2007. The bank emphasized commercial real estate lending, more than doubling its assets to nearly $500 million at a time in which many other banks were pulling back on real estate lending.
 

In an effort to keep a lid on the real estate loans, the bank had gone from 16 full time employees year-end 2008 to 21 full time employees by year-end 2009 as equity year-end 2008 was $38.2 million and 2009 a minus $6 million from $12.7 million construction and land development, $2.8 million 1-4 family residential property, $1.2 million construction and industrial loans, to $412,000 nonfarm nonresidential property loans.) Tier 1 risk-based capital ratio -1.67%. Core capital (leverage) ratio -1.30%

The FDIC and Wheaton Bank & Trust entered into a loss-share transaction on $300.2 million of Wheatland Bank's assets.
 

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $133.0 million.
http://www.fdic.gov/news/news/press/2010/pr10090.html
 

The two branches of Peotone Bank and Trust Company, Peotone, Illinois, were closed with First Midwest Bank, Itasca, Illinois to assume the deposits. PEOTONE BANCORP, INC. Peotone Bancorp is the owner of both Peotone Bank, Illinois and Legacy Bank, Scottsdale, Arizona.

Legacy Bank, Scottsdale, Arizona had a "cease and desist order" are reportedly controlled by an ownership group that had seven banks closed on July 2, 2009 that cost the FDIC $314 million.

It appears is a large mortgage company called the Legacy Group. Legacy has 23 employees and net equity has dropped from $15 million year-end 2008 to $7 million, with loss of $5 million 2008 and $8.6 million 2009 ($3.3 million charge off in construction and loans, $2.9 million in commercial and industrial loans; Tier 1 risk-based capital ratio 4.79%.

At this time, it is only Peotone that has been closed. As of December 31, 2009, Peotone Bank and Trust Company had approximately $130.2 million in total assets and $127.0 million in total deposits. The FDIC and First Midwest Bank entered into a loss-share transaction on $57.5 million of Peotone Bank and Trust Company's assets. There were 42 full time employees.

Founded January 1, 1916 the net equity had dropped from $10.3 million year-end 2008 to $4.1 million following a profit of $917,000 year-end 2008 to a $6.69 million loss year-end 2009 with $2.8 million in charges offs ($1.8 million commercial and industrial loans, $824,000 in 1-4 family residential property, $126,000 other loans, $78,000 loans to individuals. Tier 1 risk-based capital ratio 4.16%

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $31.7 million.
http://www.fdic.gov/news/news/press/2010/pr10089.html
 

The three branches of New Century Bank, Chicago, Illinois, were closed today by the Illinois Department of Financial and Professional Regulation — Division of Banking with MB Financial Bank, National Association, Chicago, Illinois, to assume all of the deposits. As of December 31, 2009, New Century Bank had approximately $485.6 million in total assets and $492.0 million in total deposits.

They had lost 9 full time employees ending up with 70 the end of 2009. Net equity had dropped from $24.7 million year-end 2008 to $13.3 million year-end 2009; after two years of loss: $18.7 million in 2008 and $12.3 million in 2009 ( $2.5 million charge off: $1.5 million in commercial and industrial loans, $391,000 loans secured by 1-4 family residential property, $265,000 secured by nonfarm nonresidential property, $66,000 multi-family residential; $19,000 loans to individuals). Tier 1 risk-based capital ratio 3.34%.Core capital (leverage) ratio 2.70%

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $125.3 million.
http://www.fdic.gov/news/news/press/2010/pr10087.html
 

The sole branch of Citizens Bank & Trust Company of Chicago, Chicago, Illinois was closed with Republic Bank of Chicago, Oak Brook, Illinois taking over the deposits. As of December 31, 2009, Citizens Bank & Trust Company of Chicago had approximately $77.3 million in total assets and $74.5 million in total deposits.

Founded January 31, 2000, the bank had gone from 25 full time employees the end of 2008 to 20th end of 2009, net equity dropping from $3.9 million to $2.35 million 2009. The bank lost $1.2 million in 2008 and $1.6 million in 2009. The main category loss was commercial and industrial loans $867,000, but also had lost $400,000 in construction and land development, $97,000 in 1-4 family home residential and $34,000 "other loans." Tier 1 risk-based capital ratio 3.93%. Core capital (leverage) ratio 2.94%.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $20.9 million
http://www.fdic.gov/news/news/press/2010/pr10086.html
 

54 Bank Ratings State of Washington:
http://seattletimes.nwsource.com/flatpages/businesstechnology/gaugethehealthofyourbank.html

List of Bank Failures
http://www.fdic.gov/bank/individual/failed/banklist.html

Bank Beat:
http://www.leasingnews.org/Conscious-Top%20Stories/Bank_Beat.htm



Disclosure: No Position