WASHINGTON (Reuters) - Bank regulators closed Illinois-based National Bank of Commerce on Friday, the first U.S. bank to fail this year but the latest in an upsurge that began last year as the struggling economy and falling home prices take their toll on financial institutions.
The Federal Deposit Insurance Corp said National Bank had $430.9 million in assets and $402.1 million in deposits. Republic Bank of Chicago will assume the failed bank’s insured deposits, it said.
In 2008, 25 banks were seized by officials, up from only 3 in 2007.
Customers can access their money over the weekend by check, teller machine or debit card, the FDIC said. Customers of both banks can use existing branches until Republic Bank fully integrates Berkeley, Illinois-based National Bank’s records, it added.
Republic Bank will also purchase $366.6 million in National Bank’s assets at a discount of $44.9 million, the agency said.
During the current financial crisis, Seattle-based lender Washington Mutual became the biggest bank to fail in the U.S. history. It was closed in September while suffering from losses from soured mortgages and liquidity problems.
The FDIC will insure up to $250,000 per account through 2009 and individual retirement account at insured banks.
The agency also has a running tally of problem banks that its examiners closely monitor. At the end of the third quarter, 171 undisclosed institutions were on that list.
Reporting by Susan Heavey; Editing by Gary Hill