Midwest Bank Seized By FDIC

By Soyoung Kwak in News on May 15, 2010 4:15PM

Banks are still facing tough draws, as another bank in Illinois closed just before the weekend. Despite receiving $85 million from a federally-distributed Troubled Asset Relief program, Midwest Bank was seized Friday after failing to raise enough capital to remain an independent bank. Midwest Bank, based in Elmwood Park, was supposed to raise between $125 million to $250 million by the May 13th deadline. The failure of Midwest Bank to raise this capital will cost the Federal Deposit Insurance Corp. around $216.4 million, and the assets and holdings of Midwest Bank will be taken over by FirstMerit of Ohio.

FirstMerit is greatly familiar with the banking scene in Chicago. In addition to the purchase of Midwest Bank, FirstMerit has taken over two other banks in Chicago. Earlier this year, FirstMerit purchased 24 branches of First Bank in Chicago and also bought the Geroge Washington Savings Bank. In all, FirstMerit has a Chicago-area deposit market share of 1.46 percent, which ranks 13th in the state. The failure of Midwest Bank is the 11th closure in Illinois this year, and 21 banks closed last year.