Bank failures in Illinois have cost the federal deposit-insurance fund nearly $1.6 billion in the past year. Fourteen banks have failed in Illinois since August 2008, making Illinois second only to Georgia, which has 23 failed banks over the period, in numbers of bank failures.
Bank failures in Illinois have cost the federal deposit-insurance fund nearly $1.6 billion in the past year.
Figures from the Federal Deposit Insurance Corp. indicate the latest bank to go under, Mutual Bank of Harvey in northern Illinois, was also the most expensive, costing the FDIC an estimated $696 million.
Fourteen banks have failed in Illinois since August 2008, making Illinois second only to Georgia, which has 23 failed banks over the period, in numbers of bank failures. However, in each of the 14 cases, federal and state regulators have found buyers for the troubled banks, and insured deposits have been protected.
A Texas banking company has taken over Mutual Bank of Harvey and its 12 branches pending a purchase.
“There has been no exposure to depositors there,” said LaJuan Williams-Dickerson, a spokeswoman for the FDIC.
Industry analysts say Illinois has had more bank failures than most states simply because the state has more bank branches.
Illinois Bankers Association chairman Thomas Hough said Tuesday he credits Federal Reserve Bank chairman Ben Bernanke with helping stabilize a banking system many feared was on the verge of collapse last fall.
Hough, who is CEO of Carrollton Bank, said it does seem the worst is over, but bankers remain cautious.
“The first stage, we would agree, was the crisis last fall, and it was fear, and there was panic,” said Hough. “There’s no question now the world is not going to fall in, and there was some doubt last fall.
“The bankers that I’m talking to say there’s still a long way to go to get back to normal,” Hough added. “We’re not out of the woods.”
Creighton University’s monthly survey of rural bankers in 10 Midwest states, including Illinois, also finds bankers in a cautious mood, said Creighton economist Ernest Goss. The survey began in 2006.
“It’s kind of been moving sideways for two or three months,” Goss said of economic sentiment.
Goss said smaller rural banks have fared better than most, thanks to relatively strong farm income. But he said states that lead in bank failures, such as Georgia and Illinois, also have a number of factors in common, including major suburban markets that have been hit hard by foreclosures and falling home prices.
“In Georgia, you have Atlanta, and you have everything else. In Illinois, you have Chicago, and you have the rest of the state,” said Goss.
Tim Landis can be reached at (217) 788-1536 or email@example.com.
Failed banks in Illinois since August 2008 and estimated cost to federal deposit-insurance fund
Mutual Bank of Harvey; $696 million.
Founders Bank, Worth; $188.5 million.
Strategic Capital Bank, Champaign; $173 million.
Citizens National Bank, Macomb; $106 million.
Corn Belt Bank & Trust Co., Pittsfield; $100 million.
National Bank of Commerce, Berkeley; $97.1 million.
Bank of Lincolnwood; $83 million.
Heritage Community Bank of Glenwood; $41.6 million.
Rock River Bank, Oregon; $27.6 million.
First National Bank of Danville; $24 million.
Meridian Bank of Eldred; $13 million.
Elizabeth State Bank, Elizabeth; $11.2 million.
John Warner Bank, Clinton; $10 million.
First State Bank of Winchester; $6 million.
Total $1.577 billion.
Source: Federal Deposit Insurance Corp.