The Michigan Office of Financial and Insurance Regulation has closed Michigan Heritage Bank and has appointed the Federal Deposit Insurance Corporation as the receiver. To protect the depositors, the FDIC has entered into a purchase and assumption agreement with Level One Bank, to assume all of the deposits, excluding those from brokers, of Michigan Heritage.
The Federal Deposit Insurance Corporation (FDIC) has said that the depositors of Michigan Heritage will automatically become depositors of Level One. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers of both banks should continue to use their existing branches until Level One can fully integrate the deposit records of Michigan Heritage.
Level One will not assume $50m in brokered deposits held by Michigan Heritage. The FDIC will pay the brokers directly for the amount of their funds. Customers who have placed money with brokers have been asked to contact them directly for more information about the status of their deposits.
In addition to acquiring $101.7m of the failed bank’s deposits, Level One has agreed to purchase approximately $46.1m in assets. The FDIC will retain any remaining assets for later disposition. The FDIC estimates that the cost to the Deposit Insurance Fund will be $71.3m.
