The failure of an Illinois bank last week brought to 110 the number of federally insured banks that have been declared insolvent this year.
The Illinois Department of Financial and Professional Regulation – Division of Banking Friday closed down Palos Bank and Trust Co.
The Palos Heights, Ill.-based institution was acquired by First Midwest Bank from the Federal Deposit Insurance Corp., which was appointed receiver.
Palos was founded in 1956, employed 122 people and had five branches.
A cease-and-desist order was issued against Palos in October by the FDIC.
Total assets as of June 30 stood at $493 million, while the failed bank had $468 million in deposits. Residential mortgage loans owned by Palos were $103 million, while commercial real estate holdings were $86 million and multifamily assets were $6 million. Another $90 million was tied up in construction-and-land-development financing.
The deposits cost First Midwest a 1 percent premium to acquire.
The FDIC agreed to absorb a portion of the losses on $344 million of the assets. The Deposit Insurance Fund is expected to lose $72 million as a result of the collapse of Palos.
The FDIC reports that 110 of the banks it insures have failed since Jan. 1. Banks account for most of the country’s home loan originations.
Mortgage Daily has tracked the closing or failure of 138 mortgage-related operations this year — including financial institutions, mortgage bankers and other mortgage-related firms.
