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MB Financial Bank, N.A., Chicago, Illinois, Assumes All of the Deposits of Heritage Community Bank, Glenwood, Illinois
Heritage Community Bank, Glenwood, Illinois, was closed today by the Illinois Department of Financial Professional Regulation, Division of Banking, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with MB Financial Bank, N.A., Chicago, Illinois, to assume all of the deposits of Heritage Community Bank.
The four offices of Heritage Community Bank will reopen as branches of MB Financial Bank on Saturday. Depositors of Heritage Community Bank will automatically become depositors of MB Financial Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers of both banks should continue to use their existing branches until MB Financial Bank can fully integrate the deposit records of Heritage Community Bank.
Over the weekend, depositors of Heritage Community Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.
As of December 5, 2008, Heritage Community Bank had total assets of $232.9 million and total deposits of $218.6 million. In addition to assuming all of the deposits of the failed bank, including those from brokers, MB Financial Bank agreed to purchase approximately $230.5 million in assets at a discount of $14.5 million. The FDIC will retain the remaining assets for later disposition.
The FDIC and MB Financial Bank entered into a loss-share transaction. MB Financial Bank will share in the losses on approximately $181 million in assets covered under the agreement. The loss-sharing arrangement is projected to maximize returns on the assets covered by keeping them in the private sector. The agreement also is expected to minimize disruptions for loan customers as they will maintain a banking relationship.
Customers who have questions about today's transaction can call the FDIC toll-free at 1-800-823-5680. The phone number will be operational this evening until 9:00 p.m., CST; on Saturday from 9:00 a.m. to 6:00 p.m., CST; on Sunday from noon to 6:00 p.m., CST; and thereafter from 8:00 a.m. to 8:00 p.m., CST. Interested parties can also visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/heritagebank.html.
The FDIC estimates that the cost to the Deposit Insurance Fund will be $41.6 million. MB Financial Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's Deposit Insurance Fund compared to alternatives. Heritage Community Bank is the fifteenth FDIC-insured institution to fail in the nation this year and the third in the state. The last FDIC-insured institution closed in Illinois was Corn Belt Bank and Trust Company, Pittsfield, on February 13, 2009.
Heritage Community Bank is not affiliated with Heritage Bank of Central Illinois, Heritage Bank of Schaumburg, or Heritage State Bank, Lawrenceville.
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Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's banking system. The FDIC insures deposits at the nation's 8,305 banks and savings associations and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. The FDIC receives no federal tax dollars – insured financial institutions fund its operations.
FDIC press releases and other information are available on the Internet at www.fdic.gov, by subscription electronically (go to www.fdic.gov/about/subscriptions/index.html) and may also be obtained through the FDIC's Public Information Center (877-275-3342 or 703-562-2200). PR-31-2009
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