Today, the Office of the Comptroller of the Currency closed Citizens National Bank, headquartered in Macomb, Illinois, and the FDIC was appointed receiver. The FDIC entered into a purchase and assumption agreement with Morton Community Bank, headquartered in Morton, Illinois, to assume all the deposits (other than brokered deposits) of Citizens National Bank.

The FDIC reported, that as of May 13, 2009, Citizens National Bank had total assets of $437 million and total deposits of approximately $400 million. Morton Community Bank also agreed to purchase approximately $240 million of the failed bank’s assets, with the FDIC retaining the remaining assets for later disposition. The FDIC and Morton Community Bank entered into a loss-share transaction in which Morton Community Bank will share in the losses on approximately $200 million in assets covered under the agreement. Morton Community Bank did not assume the $200 million in brokered deposits. The FDIC will pay the brokers directly for the amount of their funds.

The FDIC estimates that the cost to the Deposit Insurance Fund will be $173 million. Citizens National Bank is the thirty-sixth bank to fail in the nation this year and the fifth in Illinois.