Michigan Heritage is the 27th Bank to Fail

Michigan Heritage Bank, Farmington Hills, Michigan, was closed Friday by the Michigan Office of Financial and Insurance Regulation. It is the 27th bank to fail in the nation this year and the first in the state.

From FDIC: FDIC appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Level One Bank, Farmington Hills, Michigan, to assume all of the deposits, excluding those from brokers, of Michigan Heritage.

As of December 31, 2008, Michigan Heritage had total assets of approximately $184.6 million and total deposits of $151.7 million. Level One paid a premium of 1.16 percent to acquire the deposits of Michigan Heritage.

Level One will not assume $50 million in brokered deposits held by Michigan Heritage.

The FDIC estimates that the cost to the Deposit Insurance Fund will be $71.3 million. Level One’s acquisition of all the deposits of Michigan Heritage was the “least costly” resolution for the FDIC’s Deposit Insurance Fund compared to alternatives. Michigan Heritage is the 27th bank to fail in the nation this year and the first in the state. The last bank to fail in Michigan was Main Street Bank, Northville, on October 10, 2008.

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