Regulators Close Waukegan Savings Bank in Illinois

Regulators Close Waukegan Savings Bank in IllinoisThe total number of US bank failures thus far this year recently reached up to 40, with the Friday closure of the Waukegan Savings Bank – based in Waukegan, Illinois - by the Illinois Department of Financial and Professional Regulation.

Marking the sixth bank failure in Illinois this year, the two-branch Waukegan Savings Bank was seized by the Federal Deposit Insurance Corp. (FDIC), which has reportedly worked out a purchase-and-assumption deal with Itasca, Illinois-based First Midwest Bank that will be taking over the failed bank.

With First Midwest agreeing to take over Waukegan Savings, which – as of March 31 this year - had a total of nearly $88.9 million in assets and $77.5 million in deposits, an estimated $19.8 million cost will be borne by the Deposit Insurance Fund for the bank’s failure.

The taking over of the Waukegan Savings by First Midwest implies that the depositors of the failed bank will automatically become depositors of First Midwest; with deposits – for up to $250,000 per depositor - continuing to be insured by the FDIC.

Meanwhile, after the peaking of bank failures in the year 2010, the pace of bank failures in the US has been witnessing a slow down. Though a total of 450 US banks have been shuttered ever since the 2008 financial crisis, the number of bank failures in 2011 came down to 92 from 157 in 2010, which FDIC said was likely the high-water mark for bank closures from the Great Recession.