Bank closures in Illinois and Nevada late Friday stretched the year’s failure total to 16.
Illinois regulators first closed $232.9 million-asset Heritage Community Bank in Glenwood. The Federal Deposit Insurance Corp. said all $218 million of its deposits would be transferred to MB Financial Bank in Chicago.
Later, regulators announced the closure of $238 million-asset Security Savings Bank in Henderson, Nev. The FDIC said all $175 million of its deposits would be assumed by Bank of Nevada in Las Vegas.
Heritage’s four branches will open as MB Financial offices on Saturday, while Security Savings’ two branches will open on Monday as branches of Bank of Nevada, the FDIC said.
Under both deals, the acquirers also picked up substantial pieces of the failed banks’ assets.
MB Financial agreed to buy $230.5 of Heritage’s assets at a $14.5 million discount. Under the deal, the FDIC and MB Financial will share losses on a pool of $181 million of Heritage loans. As the financial crisis has unfolded, such loss-sharing deals have become a standard way for the FDIC to shift management of assets to the private sector. The FDIC estimated the failure would cost $41.6 million.
Meanwhile, Bank of Nevada agreed to buy roughly $111 million of Security Savings’ assets. The FDIC estimated that failure would cost $59 million.
The failures occurred on the same day that the agency announced a 20-basis point special assessment on the industry to help cover higher losses from a spate of failures.