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updated: 7/8/2011 6:31 PM

Northbrook Bank buys First Chicago

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First Chicago Bank & Trust, which has branches in Itasca and Bloomingdale, was closed late Friday by government authorities and then purchased by Northbrook Bank & Trust Co.

The Illinois Department of Financial and Professional Regulation appointed the Federal Deposit Insurance Corporation as receiver. To protect the depositors, the FDIC arranged for the purchase by Northbrook Bank.

"First Chicago Bank & Trust has been on the problem bank list since September 2009," said FDIC spokeswoman LaJuan Williams-Young. "Customers of the failed bank should know that their money is safe, and that all their deposits were transferred to the new institution, Northbrook Bank & Trust Company."

Customers will be able to conduct business as usual and access their funds using their check and ATM or debit cards. Loan customers should continue to make their payments as usual. If customers have questions, they should call the toll-free number (800) 517-1839, she said.

All seven branches of First Chicago Bank & Trust will reopen during normal business hours as branches of Northbrook Bank. Depositors of First Chicago then will automatically become depositors of Northbrook Bank, an FDIC spokeswoman said Friday.

Northbrook Bank is part of Lake Forest-based Wintrust Financial. Northbrook Bank also has branches in Buffalo Grove, Northfield and Deerfield.

Deposits will continue to be insured by the FDIC, so consumers should not be concerned about their banking relationship or their deposits, the FDIC said.

The FDIC estimates that the cost to the Deposit Insurance Fund will be $284.3 million. Compared to other alternatives, Northbrook Bank's acquisition was the least costly resolution for the FDIC fund.

First Chicago Bank & Trust is the 49th FDIC-insured institution to fail in the nation this year and the fifth in Illinois.

As of March 31, First Chicago had about $959 million in assets and $887.5 million in deposits. Northbrook Bank will pay the FDIC a premium of 0.50 percent to assume all of the deposits of First Chicago. In addition to assuming all of the deposits, Northbrook Bank agreed to acquire about $880.7 million of the failed bank's assets, the FDIC said.

The FDIC and Northbrook Bank & Trust Company entered into a loss-share transaction on $699.8 million of First Chicago Bank & Trust's assets. Northbrook Bank will share in the losses on the assets covered under the loss-share agreement. The arrangement is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers.