Regulators Shut Down Two Illinois Banks

Regulators shuttered two Illinois banks Friday, bringing the total number of failed U.S. banks and thrifts during 2009 to 36.

The Illinois Department of Financial and Professional Regulation seized Strategic Capital Bank of Champaign, Ill. The Federal Deposit Insurance Corp. was appointed receiver and arranged for all of the failed bank's deposits to be taken over by Midland States Bank of Effingham, Ill.

The Office of the Comptroller of the Currency then shut down Citizens National Bank of Macomb, Ill. and appointed the FDIC receiver. The FDIC then arranged for Morton Community Bank of Morton, Ill. to assume Citizens' retail deposits.

The two bank closings come on the heels of Thursday's failure of BankUnited FSB.

Please see TheStreet.com's follow-up coverage of the BankUnited failure, which includes the Bank Failure Map -- an interactive summary of all previous bank and thrift failures during 2008 and 2009.

Both of the Illinois banks that failed Friday were included in TheStreet.com's preliminary list of undercapitalized banks as of March 31.

According to preliminary first-quarter regulatory data provided by SNL Financial, 17 Illinois banks were undercapitalized under regulatory guidelines as of March 31.

While Illinois led the list with the most undercapitalized banks for any state, it is important to point out that Illinois also has more banks than any other state, with 658 as of Dec. 31. Illinois was one of the last states to remove legal barriers against out-of-state banks doing business within its borders, which is one of the reasons it is not as far along on the road to consolidation as many other states.