Finance News

National Bank of Commerce is closed by the U.S. government

National Bank of Commerce (Berkeley, Illinois) was closed today by the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation (FDIC) was named receiver.

To protect the depositors, the FDIC entered into a purchase and assumption agreement with Republic Bank of Chicago to assume all of the deposits of National Bank of Commerce.

The two locations of National Bank of Commerce will reopen on Saturday as branches of Republic Bank of Chicago. Depositors of the failed bank will automatically become depositors of Republic Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers of both banks should continue to use their existing branches until Republic Bank can fully integrate the deposit records of National Bank of Commerce.

Over the weekend, depositors of National Bank of Commerce can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.

As of January 7, 2009, National Bank of Commerce had total assets of $430.9 million and total deposits of $402.1 million. In addition to assuming all of the failed bank's deposits, Republic Bank agreed to purchase approximately $366.6 million in assets at a discount of $44.9 million. The FDIC will retain the remaining assets for later disposition.

The FDIC estimates that the cost to the Deposit Insurance Fund will be $97.1 million. Republic Bank's acquisition of all deposits was the "least costly" resolution for the FDIC's Deposit Insurance Fund compared to alternatives. National Bank of Commerce is the first bank to fail in the nation this year.

Source: FDIC
Date: 17.01.2009 [ID: 216]

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