Feb 20 - Covenant Bank, Chicago, has been closed by the Illinois Department of Financial and Professional Regulation – Division of Banking, which appointed the FDIC as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Liberty Bank and Trust Company, New Orleans, to assume all of the deposits of Covenant Bank.
As of Dec. 31, 2012, Covenant Bank had approximately $58.4 million in total assets and $54.2 million in total deposits. In addition to assuming all of the deposits of the failed bank, Liberty Bank and Trust Company agreed to purchase essentially all of the assets.
Customers with questions about the transaction should call the FDIC toll-free at 800-830-4732. Interested parties also can visit the FDIC's website at www.fdic.gov/bank/individual/failed/covenant-il.html.
The FDIC estimates that the cost to the Deposit Insurance Fund will be $21.8 million. Compared to other alternatives, Liberty Bank and Trust Company's acquisition was the least costly resolution for the FDIC's DIF. Covenant Bank is the 3rd FDIC-insured institution to fail in the nation this year, and the first in Illinois. The last FDIC-insured institution closed in the state was Citizens First National Bank, Princeton, on Nov. 2, 2012.