June 5, 2009 / 11:23 PM / 10 years ago

UPDATE 1-Bank of Lincolnwood becomes 37th failed U.S. bank

WASHINGTON, June 5 (Reuters) - U.S. banking regulators seized Bank of Lincolnwood on Friday, a small two-branch institution that became the 37th U.S. bank to fail this year.

The Federal Deposit Insurance Corp said Bank of Lincolnwood of Lincolnwood, Illinois, had $214 million in assets and $202 million in deposits as of May 26.

The failure is expected to cost the FDIC deposit insurance fund an estimated $83 million. Republic Bank of Chicago agreed to purchase about $162 million in assets, said the FDIC, which will retain the remaining assets for later disposition.

Bank of Lincolnwood’s two branches will reopen on Saturday as branches of Republic Bank of Chicago.

The pace of bank failures has accelerated in 2009 as the 18-month-old recession continues to take a toll on financial institutions. There were 25 failures in all of 2008 and just three in 2007.

Seattle-based Washington Mutual became the biggest bank to fail in U.S. history when it was seized in September with $307 billion in assets. JPMorgan Chase & Co (JPM.N) acquired the assets of Washington Mutual.

The FDIC insures up to $250,000 per account at member institutions.

The agency also has a running tally of problem banks that its examiners closely monitor. At the end of the first quarter, 305 unnamed financial institutions were on that list. (Reporting by John Poirier; Editing by Tim Dobbyn)

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