Covenant Bank, Chicago, Illinois, is the third FDIC-insured institution to fail in the nation in 2013. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $21.8 million.
Covenant Bank, Chicago, Illinois, was closed today by the Illinois Department of Financial and Professional Regulation – Division of Banking, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Liberty Bank and Trust Company, New Orleans, Louisiana, to assume all of the deposits of Covenant Bank.
The sole branch of Covenant Bank will reopen during normal business hours as a branch of Liberty Bank and Trust Company. Depositors of Covenant Bank will automatically become depositors of Liberty Bank and Trust Company. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage up to applicable limits. Customers of Covenant Bank should continue to use their current branch until they receive notice from Liberty Bank and Trust Company that systems conversions have been completed to allow full-service banking at all branches of Liberty Bank and Trust Company.
This evening and over the weekend, depositors of Covenant Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.
As of December 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 today’s transaction should call the FDIC toll-free at 1-800-830-4732. The phone number will be operational this evening until 9:00 p.m., Central Standard Time (CST); on Saturday from 9:00 a.m. to 6:00 p.m., CST; on Sunday from noon to 6:00 p.m., CST; on Monday from 8:00 a.m. to 8:00 p.m., CST; and thereafter from 9:00 a.m. to 5:00 p.m., CST.
If you should have ant further questions please do not hesitate to visit the FDIC web page for Covenant Bank.