CLINTON - John Warner Bank, a fixture of downtown Clinton since 1867, was closed by state regulators Thursday in what apparently was the first area bank failure in this recession.

Acting as receiver for the bank, the Federal Deposit Insurance Corp. arranged for State Bank of Lincoln to assume bank deposits. Warner's main office, branch and drive-up facility will reopen today as branches of the Lincoln bank.

The Illinois Department of Financial and Professional Regulation, Division of Banking, closed the bank, but deposits are insured, an FDIC statement said.

Drive-up customers pulling up after the regulators moved in reacted positively to the news, FDIC spokeswoman Roberta Valdez said.

"We told them no one lost any money, and it's business as usual," Valdez said.

Customers should notice no change in the transfer because checks, ATM cards and online banking services will remain the same, Steve Aughenbaugh, State Bank of Lincoln president, said late Thursday afternoon.

Warner was among six Illinois banks, all controlled by one family, taken over by the FDIC on Thursday. The founding Warner family of Clinton sold the bank in 2003 to JW Bancorp.

Twelve Illinois banks now have been closed this year.

As of April 30, Warner had assets of $70 million and deposits of approximately $64 million.

In addition to assuming all the Warner deposits, the Lincoln bank agreed to buy about $63 million of assets. The FDIC will retain the remaining assets for later disposition.

The cost of the bank failure to the FDIC's insurance fund is estimated to be about $10 million.

An FDIC team and a state regulator went into Warner at closing time at 3 p.m. Thursday to initiate the transition, Valdez said.

"Obviously, it was a shock, a trauma" to employees, she said.

Forty people from the FDIC's Dallas, Texas, office will work through the weekend with bank employees to complete the transition, including balancing all accounts and inventorying all loans, Valdez said.

"They've jumped right in - they're troupers," she said the bank's 26 full- and part-time employees.

The Clinton bank was going to be closed today for the holiday, but the Lincoln bank decided to open the Clinton bank facilities, Valdez said.

John Warner Bank

- Founded: 1867 as John Warner and Co. with initial capitalization of $50,000. It incorporated in 1911 as a state bank and assumed its present name. In 1947, the bank qualified with the state to act as a trust company.

- Location: Southeast corner of the square, Clinton

- Highlights: Installed county's first drive-up windows (1956); constructed television drive-up across Adams Street with pneumatic tubes (1972); installed first ATM in the bank's foyer (1983); expanded into the second story to house its trust, farm management and loan departments (1988); introduced JWB Telebank to provide customers with account information by phone (1992); opened first branch, in Clinton IGA (1996); introduced JWB Checkcard as debit card (1996); introduced The John Warner Bank Online (2000).

SOURCE: JohnWarnerBank.com

State Bank of Lincoln

- Founded: Sept. 4, 1903; doors opened Jan. 16, 1904.

- Locations: 508 Broadway (main office); State Bank West, 818 Woodlawn Road, Lincoln (1979); Cornland Banking Center, Day and Locust streets, Cornland (1990); Sangamon Street Facility, 111 N. Sangamon, Lincoln (1992); fifth location inside Wal-Mart Supercenter (2007).

SOURCE: SBLincoln.com

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