US regulators seize Midwest Bank and Trust of Ill.

WASHINGTON, May 14 (BestGrowthStock) – U.S. regulators seized four
more banks on Friday, including Midwest Bank and Trust Co of
Elmwood Park, Illinois, which had $3.17 billion in assets.

The failures bring the year tally up to 72. Small banks are
continuing to collapse at a rapid pace, with deteriorating loan
portfolios that burn through their capital positions.

Bank failures are expected to peak in the third quarter of
this year, but regulators have recently said conditions are
easing with some small banks raising significant capital and
averting failure.

Besides Midwest Bank and Trust, the FDIC announced the
closings of:

* Satilla Community Bank of Saint Marys, Georgia, with
about $135.7 million in total assets. Ameris Bank assumes its

* New Liberty Bank of Plymouth, Michigan, with $109.1
million in assets. Bank of Ann Arbor assumes its deposits;

* Southwest Community Bank of Springfield, Missouri, with
$96.6 million in assets. Simmons First National Bank of Pine
Bluff, Arkansas, assumes its deposits.

The total number of bank failures this year is supposed to
exceed last year’s count of 140. In 2008, 25 banks failed, and
only three failed in 2007.

The recovery of community banks has lagged the more rapid
bounceback of large financial firms and the economy overall.

FDIC Chairman Sheila Bair has argued that the large banks
are enjoying disproportionately low funding costs because they
are still perceived as too big to fail.

Such a perception can cause deposits to migrate from
smaller banks to larger ones.

Regulators hope measures in the financial reform bill,
including a process to dismantle insolvent financial giants,
will help level the playing field.

The FDIC will provide an update of the health of the
banking industry (Read more about the banking industry recovery.) on Thursday when it holds its briefing on
first-quarter earnings.

The agency will also update the number of institutions on
its troubled bank list.

The number of problem U.S. banks jumped 27 percent during
the fourth quarter of 2009 to 702, the highest level since

The majority of the banks on that list do not fail, but it
is an indicator of the depth of the industry’s woes.

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(Reporting by Karey Wutkowski and Richard Cowan; Editing by
Bernard Orr)

US regulators seize Midwest Bank and Trust of Ill.