WORTH, Ill. – Regulators closed another seven banks last Thursday, including six of them in Illinois owned by the Campbell family, which operates nine banks in Illinois.
The Campbell banks failed because of the state’s sour economy and a high concentration of investments in failed collateralized debt obligations, which are backed by assets, mostly mortgages, according to the FDIC, which arranged the sale of the banks’ good assets, and assumed the bad liabilities.
The family’s Campbell Group LLC is headed by the swashbuckling patriarch Lyle Campbell who led a team that flew a 1954 Grumman Albatross seaplane in the 12,000-mile 2001 Great Race from London to Sydney, Australia. Campbell purchased his first bank in 1973 and purchased his first airplane in 1974, a Cessna 172, and used it to fly to the bank's board meetings. Over the years his bank group grew to twelve banks and his aviation interest included a company which flew checks around the Midwest.
The six banks; Founders Bank of Worth, John Warner Bank of Clinton, First State Bank of Winchester, Rock River Bank of Oregon, Elizabeth State Bank of Elizabeth and First National Bank of Danville, had total assets of almost $1.4 billion and will cost the FDIC and estimated $236 million to resolve after it sells off the good assets to area banks in purchase and assumption agreements.
The FDIC intentionally closed the banks on the day before the long holiday weekend, in order to reopen the branches under new ownership on Monday morning.
The failures bring to 12 the number of Illinois banks closed this year. Illinois has the most banks in the country about 650.
The six seizures and one in Texas make a total of 52 bank failures so far this year, twice last year’s total of 25. There were just three failures in 2007.
