Weekend Economists Take a Shot in the Dark, September 28-30, 2012

[Demeter]

2. AND, WE HAVE A BANK DOWN!

First United Bank, Crete, Illinois, was closed today by the Illinois Department of Financial and Professional Regulation – Division of Banking, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Old Plank Trail Community Bank, National Association, New Lenox, Illinois, to assume all of the deposits of First United Bank.

The five branches of First United Bank will reopen during normal business hours as branches of Old Plank Trail Community Bank, N.A...As of June 30, 2012, First United Bank had approximately $328.4 million in total assets and $316.9 million in total deposits. Old Plank Trail Community Bank, N.A. will pay the FDIC a premium of 0.60 percent to assume all of the deposits of First United Bank. In addition to assuming all of the deposits, Old Plank Trail Community Bank, N.A. agreed to purchase essentially all of the failed bank's assets.

The FDIC and Old Plank Trail Community Bank, N.A. entered into a loss-share transaction on $172.7 million of First United Bank's assets...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $48.6 million. Compared to other alternatives, Old Plank Trail Community Bank, N.A.'s acquisition was the least costly resolution for the FDIC's DIF. First United Bank is the 43rd FDIC-insured institution to fail in the nation this year, and the seventh in Illinois. The last FDIC-insured institution closed in the state was Waukegan Savings Bank, Waukegan, on August 3, 2012.