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The Office of the Comptroller of the Currency closed Crete, Illinois-based First United Bank on September 28, 2012. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Old Plank Trail Community Bank of New Lenox, Illinois to assume all of the deposits of First United.
You can read the FDIC Press Release here.
On November 9, 2011, the Will County Treasurer’s Office informed First United Bank that the bank would be required to pledge additional collateral to protect the county’s deposits.
Pursuant to our Investment Policy of August 2011 (attached), we set collateral pledge requirements based upon a bank’s Tier I Risk-Based Capital Ratio (Tier I Capital divided by Total Risk-Weighted Assets).
When calculating this ratio using data from First United Bank’s call report of September 30, 2011, we calculate the ratio to be 6.14%. Under our Investment Policy, this ratio coincides with a collateral pledge of 106% of market value to amount deposited.
The Treasurer’s Office began withdrawing its deposits beginning in the Fourth Quarter of 2011 as well as allowed CDs to mature. The Treasurer’s Office made no new deposits at First United in 2012. First United, however, did collect property tax payments in 2012 because the institution historically collects more than 4,500 parcels annually.
At the time the Comptroller closed First United Bank, Will County had deposits worth $3,074,245.79 with a collateral pledge and FDIC insurance totaling $3,300,000.00. This means that all public funds were protected at the time of the OCC action.
On October 2, 2012 as part of the Eleventh Property Tax Distribution, the Will County Treasurer’s Office withdrew $3-million for First United Bank without incident. The remaining balance is less than FDIC insurance limits and will be withdrawn in connection with future property tax distributions.
Because Old Plank Trail is an approved Will County Depository, the county will continue collecting property taxes at all locations of First United Bank. Treasurer’s Office staff has asked for a meeting with the senior leadership of Old Plank Trail to discuss continuing the relationship.