Regulators close Burlington bank
First Banking Center of Burlington has become the third Wisconsin bank to be closed by regulators because of the financial collapse of the Great Recession.
The bank was closed Friday by the Wisconsin Department of Financial Institutions, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver.
To protect the depositors, the FDIC entered into a purchase and assumption agreement with First Michigan Bank of Troy, Mich., to assume all of the deposits of First Banking Center.
The 17 branches of First Banking Center will reopen during normal business hours beginning Saturday as branches of First Michigan Bank. Depositors of First Banking Center will automatically become depositors of First Michigan Bank.
Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage up to applicable limits. Customers of First Banking Center should continue to use their existing branch until they receive notice from First Michigan Bank that it has completed systems changes to allow other First Michigan Bank branches to process their accounts as well.
This evening and over the weekend, depositors of First Banking Center 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 Sept. 30, First Banking Center had approximately $750.7 million in total assets and $664.8 million in total deposits. First Michigan Bank will pay the FDIC a premium of 0.50 percent to assume all of the deposits of First Banking Center. In addition to assuming all of the deposits of the failed bank, First Michigan Bank agreed to purchase essentially all of the failed bank’s assets.
The FDIC and First Michigan Bank entered into a loss-share transaction on $515.6 million of First Banking Center’s assets. First Michigan Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers.
Customers who have questions about today’s transaction can call the FDIC toll-free at 1-800-830-3256.
First Banking Center is the 149th FDIC-insured institution to fail in the nation this year. The troubled banks are generally closed on Friday after business hours.
Earlier this year, regulators closed Maritime Savings Bank, West Allis, which became part Brookfield-based North Shore Bank. In 2009, the Bank of Elmwood in Racine was closed and became part of Tri City National Bank.
