Regulators on Friday shut down a small bank in Chicago, lifting to 109 the number of U.S. bank failures this year.
The Federal Deposit Insurance Corp. said it was appointed receiver of Ravenswood Bank, which had roughly $264.6 million in assets and $269.5 million in deposits as of June 30.
The bank's assets and deposits will be assumed by Northbrook Bank and Trust Co., based in Northbrook, Ill., the FDIC said. Its branches will reopen on Saturday.
The closure brings to 13 the number of bank failures this year in Illinois.
The failure of Ravenswood Bank is expected to cost the deposit insurance fund $68.1 million.
At 109, the pace of U.S. bank failures this year is running ahead of 2009, already a brisk year for shutdowns. By this time last year, regulators had closed 72 banks. The pace has accelerated as banks' losses mount on loans made for commercial property and development.
Many companies have shut down in the recession, vacating shopping malls and office buildings financed by the loans. That has brought delinquent loan payments and defaults by commercial developers.
The number of bank failures is expected to peak this year and be slightly higher than the 140 that fell in 2009. That was the highest annual tally since 1992, at the height of the savings and loan crisis. The 2009 failures cost the insurance fund more than $30 billion. Twenty-five banks failed in 2008, the year the financial crisis struck with force; only three succumbed in 2007.
The growing bank failures have sapped billions of dollars out of the deposit insurance fund. It fell into the red last year, and its deficit stood at $20.7 billion as of March 31.
The number of banks on the FDIC's confidential "problem" list jumped to 775 in the first quarter from 702 three months earlier, even as the industry as a whole has seen its fortunes improve.
Many small and midsize banks are likely to continue to suffer distress in the coming months and years, especially from soured loans for office buildings and development projects.
The FDIC expects the cost of resolving failed banks to total around $60 billion from 2010 through 2014.
The agency mandated last year that banks prepay about $45 billion in premiums, for 2010 through 2012, to replenish the insurance fund.
Depositors' money — insured up to $250,000 per account — is not at risk, with the FDIC backed by the government. That insurance cap was made permanent in the financial overhaul legislation recently signed into law by President Barack Obama.
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