U.S. regulators seized Ravenswood Bank of Chicago on Friday, bringing the number of closures this year to 109 as the community bank sector continues to suffer under the weight of bad loans.
Wintrust Financial Corp's
Ravenswood Bank had about $264.6 million in assets and $269.5 million in deposits as of June 30, the FDIC said.
In a statement, FDIC said Northbrook Bank will pay the FDIC a premium of 0.90 percent on the non-brokered deposits of Ravenswood Bank. In addition to assuming the non-brokered deposits of the failed bank, Northbrook Bank agreed to purchase essentially all of the assets.
Small banks are collapsing at a faster pace this year compared to last, but the failures are expected to peak during this quarter.
The recovery of the community bank industry has lagged behind that of Wall Street and the larger economy.
Although failures are still occurring at a rapid pace, it is mostly smaller institutions that have been collapsing recently.
The biggest bank failure of the crisis was Washington Mutual, which had $307 billion in assets when it was seized in September 2008.
In the current crisis, the problems dogging the banking industry have migrated from home mortgages to commercial real estate, especially for community banks that tend to have higher concentrations of commercial real estate loans.
The FDIC recently gave an update on the overall health of the bank industry, saying it sees improvements, but economic threats are still lurking.
The agency, which insures individual accounts up to $250,000, updated its estimates of the cost of bank failures and now expects a $60 billion hit to its insurance fund from 2010 through 2014.
(Reporting by Christopher Doering; Editing by Gary Hill)