WASHINGTON – Regulators have closed a small lender in Illinois, making it the first U.S. bank failure of 2014 following 24 closures last year.
The Federal Deposit Insurance Corp. said Friday it has taken over DuPage National Bank, based in West Chicago, Ill.
The lender, which operated three branches, had about $61.7 million in assets and $59.6 million in deposits as of Sept. 30.
Republic Bank of Chicago, based in Oak Brook, Ill., agreed to pay the FDIC a premium of 1.20 per cent to take on all of DuPage National Bank’s deposits.
Republic Bank also agreed to buy essentially all of the failed bank’s assets.
The failure of DuPage National Bank is expected to cost the deposit insurance fund $1.6 million.
U.S. bank failures have been declining since they peaked in 2010 in the wake of the financial crisis and the Great Recession.
In 2007, only three banks went under. That number jumped to 25 in 2008, after the financial meltdown, and ballooned to 140 in 2009.
In 2010, regulators seized 157 banks, the most in any year since the savings and loan crisis two decades ago. The FDIC has said 2010 likely was the high-water mark for bank failures from the recession. They declined to a total of 92 in 2011, and fell to 51 in 2012.
Last year, bank failures slowed to 24 — still more than normal. In a strong economy, an average of four or five banks close annually.
From 2008 through 2011, bank failures cost the deposit insurance fund an estimated $88 billion, and the fund fell into the red in 2009. With failures slowing, the fund’s balance turned positive in the second quarter of 2011.
The fund had a $40.8 billion balance as of Sept. 30, up from $37.9 billion at the end of June.
The FDIC has said it expects bank failures from 2012 through 2016 will cost the fund $10 billion.