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Failed bank reopens under new ownership

PRINCETON – It was business as usual – almost – at the former Citizens First National Bank on Monday morning.

Tellers, receptionists and administrators went about their usual duties, but the phones were answered with “Heartland Bank ... formerly Citizens First National Bank,” and the Citizens logo was replaced with Heartland’s on everyone’s business cards.

A uniformed Illinois State trooper sat inside the door while men with clip-on FDIC tags bustled about.

And Citizens First National Bank President and CEO Tom Ogaard no longer was in charge.

Instead, Heartland Bank and Trust Chairman and CEO Fred Drake milled around the lobby at 606 S. Main St., greeting customers, speaking with staff and attending to what seemed like a multitude of duties.

The FDIC took over Citizens First National on Friday after the Office of the Comptroller of the Currency determined the bank had incurred losses because of “unsafe and unsound practices.”

Citizens had 21 branches in 17 northern Illinois communities, including Oglesby and Peru. They reopened Saturday as Heartland Bank locations.

Heartland, headquartered in Bloomington, now has assets of $2.9 billion and offices in 48 communities in Illinois and northeast Missouri.

By acquiring Citizens First National’s $924 million in assets, Heartland increased its assets by nearly 50 percent. It also acquired $869.4 million in total deposits from Citizens First National.

This is the fourth failed bank acquired by Heartland Bank, and it is the largest acquisition, according to Heartland spokeswoman Amy Bartels. Heartland Bank acquired the failed Bank of Illinois in Normal in 2010.

The FDIC said Citizens First National Bank’s failure will cost the Deposit Insurance Fund an estimated $45.2 million. The acquisition by Heartland Bank was considered the least costly resolution, according to the FDIC.

Citizens First National customers can continue to use their checks and ATM/debit cards to access their funds. Direct deposits and automatic payments also will continue as scheduled.

Citizens employees first learned of the change at a company meeting called at 5 p.m. Friday, when the federal regulators and Heartland entered the bank. Friday evening, Saturday and Sunday, the FDIC performed a detailed inventory of the bank, Drake said.

“They (FDIC) turned it over to us today with a complete inventory,” Drake said late Monday morning, noting the ISP troopers stationed at all Citizens locations were the FDIC’s “standard operating procedures.”

A third-generation Heartland CEO/chairman, Drake spoke highly of the staff, and said he understood the loss the community must feel with the demise of Citizens.

“This has been a proud community bank,” he said. “I understand that a rural community has memories. It’s been the same name for over 100 years. ...

“We have been impressed with the staff and many of those who have a lot of longevity with the bank. ... We need these folks to help us run this bank.”

Drake said he’s always had his eye on Citizens First National Bank.

“I’ve always liked the bank. They were basically doing the same thing we were. ... It was an easy decision to proceed with. ... Princeton is a strong community, and Citizens was a strong bank.

“Unfortunately they got caught in the economy. Princeton is not going to be a small operation for us. It’s very significant to us.”

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