Illinois state regulators closed Fayette County Bank last night. The bank had been losing money and had been effectively insolvent for some time. It had $34 million in deposits and assets only 1 percent larger as of March 31, but those numbers would be somewhat smaller as of the bank closing yesterday. The bank was faced with deposit flight in recent weeks as depositors lost confidence in its financial condition, and it looks like the decline in the balance sheet prompted regulators to act. United Fidelity Bank is taking over all the deposits and purchasing around 80 percent of the assets. The one operating location is now a branch of United Fidelity Bank.
There are more zombie banks, so the pace of bank failures will pick up if repressive federal economic policies create a new recession. The FDIC has liquidated six banks so far this year.
