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Small Banks Fail in Illinois, Nevada

State regulators closed Heritage Community Bank of Glenwood, Ill. and Security Savings Bank of Henderson, Nev. Friday, bringing the total number of U.S. banking institutions closed during 2009 to 16.

The Federal Deposit Insurance Corp. was appointed receiver and arranged for other institutions to acquire all of the failed banks' deposits, including uninsured balances and CD deposits made through brokers.

Both failed institutions were included in's updated list of undercapitalized banks, which is the second list in our recent article focusing on undercapitalized savings and loans.

Please see's Bank Failure Map for an interactive summary of all previous bank and S&L failures during 2008 and 2009.

The FDIC also announced amendments to the restoration plan for its deposit insurance fund, including an extra 20-basis point assessment on deposits, in addition to deposit insurance premiums already being collected. The assessments will be charged on Sept. 30.

When the FDIC released its Quarterly Banking Profile Thursday, it announced that its deposit insurance fund totaled $18.9 billion as of Dec. 31, a decline of $15.7 billion during the fourth quarter, as the agency handled twelve bank failures.

The agency also announced a combined net loss of $26.2 billion for the bank and S&L industry during the fourth quarter of 2008.

Heritage Community Bank

Heritage Community Bank had total assets of $233 million and total deposits of $219 million. MB Financial Bank of Chicago (a subsidiary of MB Financial (MBFI - Get Report)) agreed to assume all of the closed institution's deposits and most of its assets for a discount of $14.5 million. Heritage Community's four offices were to reopen as branches of MB Financial on Saturday.
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