As of November 24, 2010, the First Banking Center in Burlington, Wisconsin, was the latest U.S. failed banks. The Bank was closed on Friday, November 19th,by the State of Wisconsin Department of Financial Institutions, and the Federal Deposit Insurance Corporation (FDIC) was named Receiver. Advance notice is not given to the public when a financial institution is closed.
The FDIC updates failed bank information on its website each Friday. First Banking Center is the 149th FDIC-insured institution to fail in the nation this year, and the second in Wisconsin.
All deposit accounts of First Banking Center, excluding certain Cede & Co. deposits, have been transferred to First Michigan Bank, a Troy, Michigan financial institution, and will be available immediately to customers. Depositors of First Banking Center will automatically become depositors of First Michigan Bank. The 17 former First Banking Center locations reopened as branches of First Michigan Bank on Saturday, November 20, 2010, during regular business hours.
According to the FDIC’s website, deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage. It is noted that customers of First Banking Center should continue to use their existing branch until they receive notice from First Michigan Bank that it has completed systems changes to allow other system branches to process their accounts as well.
As of September 30, 2010, First Banking Center had approximately $750.7 million in total assets and $664.8 million in total deposits. First Michigan Bank will pay the FDIC a premium of 0.5 percent to assume all of the deposits of First Banking Center. In addition to assuming all of the deposits of the failed bank, First Michigan Bank agreed to purchase mostly all of the assets.
The FDIC and First Michigan Bank entered into a loss-share transaction on $515.6 million of First Banking Center’s assets. Under loss sharing, the FDIC agrees to absorb a portion of the loss on a specified pool of assets in order to maximize asset recoveries and minimize FDIC losses.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $142.6 million. Customers who have questions about this transaction can call the FDIC toll-free at 1-800-830-3256 during designated hours. For more information on this transaction, visit the FDIC’s website at www.fdic.gov/bank/individual/failed/firstbanking.html . The complete FDIC failed bank list can be viewed at http://www.fdic.gov/bank/individual/failed/banklist.html .