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Illinois state regulators on Friday seized Bank of Lincolnwood and appointed the Federal Deposit Insurance Corp. receiver. The FDIC arranged for Republic Bank of Chicago, of Oak Brook, Ill. to take over all of the failed institution's deposits.
In addition to the failed institution's deposits, Republic Bank of Chicago agreed to purchase $162 million of its assets, with the FDIC retaining the rest for later disposition. The agency projected that its losses from Bank of Lincolnwood's failure would total $83 million.
Lincolnwood was the sixth Illinois bank to fail this year, tying the state with Georgia for the largest number of bank failures in 2009. The previous two Illinois banks to fail were Strategic Capital Bank of Champaign and Citizens National Bank of Macomb, both on May 22.
Georgia leads all states with 11 bank or thrift failures during 2008 and 2009, followed by California with nine failures, Illinois with seven, Florida with five and Nevada with four.
Bank of Lincolnwood was included in TheStreet.com's latest list of undercapitalized banks and thrifts, which was published last week. As of March 31, the institution's Tier 1 leverage ratio was just 1.16%, and its total risk-based capital ratio was 2.63%. These ratios need to be at least 5% and 10%, respectively, for most institutions to be considered well-capitalized under regulatory capital requirements.
Large bank holding companies that have acquired failed institutions during 2008 and 2009 include JPMorgan Chase (JPM), which acquired Washington Mutual, the largest bank or thrift ever to fail in the U.S., SunTrust Banks(STI), Regions Financial(RF), Zions Bancorp(ZION), Fifth Third Bancorp(FITB), US Bancorp(USB) and BB&T(BBT).
TheStreet.com Ratings, recently cited for Best Stock Selection from October 2007 through February 2009, is an independent research provider that combines fundamental and technical analysis to offer investors tremendous value in volatile times. It provides independent and very conservative financial strength ratings on each of the nation's 8,500 banks and savings and loans, which are available at no charge on the Banks & Thrifts Screener. To see how your portfolio can use this and other research, click here now!.
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