US Bank Closures Reach Two In 2015 As Regulators Close Small Bank In Illinois

(RTTNews) - The Federal Deposit Insurance Corp. or FDIC, announced Friday the shuttering of a small bank in Illinois, taking the count of total U.S. bank closures in 2015 to two, after 18 in 2014, 24 in 2013, 51 in 2012, 92 in 2011 and the 157 bank closures in 2010.

Highland Community Bank is the first FDIC-insured institution to fail in the state of Illinois this year. Highland Community Bank is a minority-owned community bank that has served the financial needs in its service area for over 40 years.

The Highland Community Bank was closed on Friday by the regulators, with the assets of the failed bank being assumed by United Fidelity Bank in an FDIC assisted transaction. The FDIC estimates that the cost to the Deposit Insurance Fund or DIF, by the bank closure will be $5.8 million.

Chicago, Illinois-based Highland Community Bank was closed by the Illinois Department of Financial & Professional Regulation—Division of Banking on Friday. As of December 31, 2014, the bank had about $54.7 million in total assets and $53.5 million in total deposits.

The century-old Evansville, Indiana-based United Fidelity Bank acquired the banking operations, including all the deposits, of Highland Community Bank, from the FDIC, and agreed to purchase essentially all of the assets.

The FDIC noted that all customers of the two branches of Highland Community Bank can this evening and over the weekend access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed, and loan customers should continue to make their payments as usual.

Depositors of the failed banks will automatically become depositors of the new bank and deposits will continue to be insured by the FDIC.

Customers of failed bank are protected, by the FDIC, which has insured bank deposits since the Great Depression, currently covering customer accounts up to $250,000. The FDIC currently insures deposits at the nation's 6,589 banks and savings associations.

Banks failures have continued at a relatively slow pace in 2014 and 2013, with the size and number of closures being well below levels seen during the prior three years. At the same time last year, two banks had failed.

On an average, only less that two banks have failed per month in 2014, two in 2013 and just above four in 2012, with bank closures for 2011 averaging eight per month, and thirteen in 2010.

The 18 bank closures in 2014 were lower than 24 bank closures in 2013 and e sharply down from 51 in 2012, 92 in 2011, the peak of 157 in 2010 in the wake of the financial crisis, and 140 in 2009, but just below the 25 bank failures in 2008.

Meanwhile, only three banks failed in 2007, and a total of 23 in the six years prior to that. The highest and all time record for bank closures was in 1989 when 534 banks closed, followed by 181 bank failures in 1992.