Two banks -- one in Illinois and one in Michigan -- failed on Friday night, the FDIC said, underscoring just how much the credit crunch is hurting financial institutions. The FDIC said that depositors in both would continue to have uninterrupted access to their money, and they would still be insured. It estimates that the two failures will cost its insurance fund between $46 million and $53.5 million.
Main Street Bank of Northville, Mich., was closed by Michigan state officials, and the FDIC was named receiver. Monroe Bank & Trust of Monroe, Mich., will assume all of Main Street Bank's deposits. Main Street Bank had $98 million in total assets as of Oct. 7, and $86 million in total deposits. Monroe has agreed to pay a premium of 1% for the failed bank's total deposits. Main Street Bank's two offices were scheduled to reopen Saturday morning as Monroe branches.
Meridian Bank in Eldred, Ill., which had $39.18 million in total assets and $36.88 million in total deposits, was closed by Illinois state officials, and the FDIC was named receiver of the assets. National Bank in Hillsboro, Ill., will assume all of Meridian's deposits. National Bank will purchase about $7.55 million of Meridian's assets, and did not pay the FDIC a premium for the right to assume all of the failed bank's deposits. The FDIC will retain the remaining assets for later disposition. Meridian's four offices, located in the Illinois cities of Altamont, Alton, Carlyle and Eldred, will reopen as National Bank branches on their next day open for business.
For more information on what to do if you were a customer of this bank, visit the FDIC's "Failed Bank List" which is now up to 15 banks for 2008.