Strategic Capital Bank, Champaign, IL

Regulators seized a Champaign, Illinois, bank late Friday, as the financial crisis claimed the 35th federally insured financial institution of 2009.

The Federal Deposit Insurance Corp. estimated that the failure of Strategic Capital Bank would cost its deposit-insurance fund $173 million. Strategic is the fourth Illinois bank to be closed by regulators so far this year.

Strategic had total assets of $537 million and total deposits of $471 million as of May 13. Midland States Bank, based in Effingham, Ill., reached an agreement with the FDIC to assume all of the failed bank’s deposits.

Midland also took over Strategic’s one office, which will reopen after Memorial Day under its new owner. As part of the agreement, Midland will buy $536 million of Strategic’s assets and hold $1 million in remaining assets “for later disposition,” the agency said. The FDIC and Midland also agreed to share losses on an asset pool totaling $420 million.

The failed bank was shuttered by the Illinois Department of Financial and Professional Regulation.

The seizure is the latest sign of how the financial crisis is squeezing smaller banks across the U.S. amid mortgage and other loan-related losses.

The 35 failures in 2009 are 10 more than the 25 that collapsed in all of 2008. Dozens more are expected to collapse through 2010.

Friday’s failure came a day after federal regulators seized Florida’s BankUnited FSB in the year’s biggest bank bust so far. The FDIC estimates BankUnited will cost its insurance fund $4.9 billion, making it the second-costliest bank failure of the current crisis after IndyMac Bank, which cost the FDIC about $11 billion.

More information can be found at the FDIC web site.

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