The Federal Deposit Insurance Corp. took over four more banks on Friday, bringing the total number of failures so far this year to 72.
Included in Friday's closings was the Midwest Bank and Trust Co. of Elmwood Park, Ill., which had been owned by Midwest Banc Holdings, Inc. of Melrose Park, Ill. Midwest Banc Holdings got $84.8 million from the Troubled Assets Relief Program in December 2008, which it had not repaid, according to the latest Treasury Department report on TARP transactions.
But the Treasury Department report also shows that in March it increased its investment in Midwest Banc Holdings to $89.4 million, which could have been converted into common stock. The additional money was not an additional cash outlay, but rather reflected the fact that Midwest had not paid the Treasury the dividends it owed on the original investment.
Repayment of that money now seems unlikely with the collape of Midwest Bank and Trust. A Midwest Banc news release issued Friday said, "The company's ownership interest in the bank represented substantially all of the company's assets."
The FDIC estimated that the failure of the bank, which had $3.2 billion in assets, will cost the insurance fund about $216.7 million. All told, the 72 failures have cost an estimated $16.5 billion.
Midwest Bank and Trust was acquired by FirstMerit Bank, National Association of Akron, Ohio. It was the second failed Illinois bank that FirstMerit had bought this year. In February it purchased George Washington Savings Bank of Orland Park, Ill. FirstMerit also got $125 million in TARP funds in January 2009, but it repaid the government in April 2009.
For details about all this year's bank failures, see BankTracker.