We May Have Hit Rock Bottom… Legacy Bank Is Closed

From BizTimes.com – Regulators close Legacy Bank of Milwaukee 

Minority-owned Legacy Bank of Milwaukee was closed today by the Wisconsin Department of Financial Institutions, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver.

To protect the depositors, the FDIC entered into a purchase and assumption agreement with Seaway Bank and Trust Company of Chicago to assume all of the deposits of Legacy Bank. The sole branch of Legacy Bank in downtown Milwaukee at 2102 W. Fond du Lac Ave. will reopen on Saturday as branch of Seaway Bank and Trust Company. Depositors of Legacy Bank will automatically become depositors of Seaway Bank and Trust Company.

Legacy Bank was founded in 1999 by three Milwaukee African-American women -Deloris Sims, Margaret Henningsen and Shirley Lanier. They raised $5 million startup capital to open the inner city bank.

July 1999 – The original founders raise the required capital of $5 million and meet all regulatory requirements to charter Legacy Bank. Above (L to R):

Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage up to applicable limits. Customers of Legacy Bank should continue to use their existing branch until they receive notice from Seaway Bank and Trust Company that it has completed systems changes to allow other Seaway Bank and Trust Company branches to process their accounts as well.

This evening and over the weekend, depositors of Legacy Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.
As of Dec. 31, 2010, Legacy Bank had approximately $190.4 million in total assets and $183.3 million in total deposits. In addition to assuming all of the deposits of the failed bank, Seaway Bank and Trust Company agreed to purchase approximately $165.9 million of Legacy Bank’s assets. The FDIC will retain the remaining assets for later disposition.

The FDIC and Seaway Bank and Trust Company entered into a loss-share transaction on $120.0 million of Legacy Bank’s assets. Seaway Bank and Trust Company will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html.

Customers who have questions about today’s transaction can call the FDIC toll-free at 1-800-430-7974. Interested parties also can visit the FDIC’s Web site at http://www.fdic.gov/bank/individual/failed/legacy-wi.html.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $43.5 million. Legacy Bank is the 25th FDIC-insured institution to fail in the nation this year, and the third in Wisconsin. The last FDIC-insured institution closed in the state was Badger State Bank, Cassville, on Feb. 11.

This entry was posted in African American Business Leaders, Black Businesses, Milwaukee Black Businesses and tagged , , , , , . Bookmark the permalink.

4 Responses to We May Have Hit Rock Bottom… Legacy Bank Is Closed

  1. Disrael says:

    OMG!!! This IS rock bottom for Milwaukee in general, Black Milwaukee in particular. I am not one to be lost for words yet all I can say is this is fucked up. Is this our legacy, are we going to go out as a people and a city without even putting up a fight? I never thought I would shed a tear over a bank, but this is a sad day in Milwaukee. Kudos to those sisters who founded the bank and white sister-girl too. They had a great staff. Good-looking, professional, young Black folk. I especially liked the security guard. He would escort you to your car after your $5 transaction, like you were really a VIP. Good luck to all of them and good luck to all of us. Power to the people and may God have mercy on our souls. Peace

  2. Lola says:

    I need to say thank you for writing this blog post.

  3. Cavalier "Chevy" Johnson says:

    One of the toughest parts about the Legacy closing is that this bank had a strong record of making loans to those looking to create business and jobs in Milwaukee’s Central City.

    It will take a unified grassroots community effort and even some retooling of thought, but we can ensure that the “Legacy” and tradition of this first of its kind bank continue on.

    The women that started Legacy Bank didn’t wait for someone to do it for them, they banded together and made something wonderful happen – something that was beneficial to our community. They increased accessibility to capital for those looking to make improvements right here in the heart of Milwaukee.

    Together, we can still make that happen.

  4. Disrael says:

    It seems as though the receiver bank, Seaway National Bank, is a Black-owned bank with a long history in Chicago, IL. Seems like maybe only upper management is being moved around. The day-to-day operations, the tellers and other staff were all still working as of Monday, even the security guard.

    The emotional responses are understandable. There must be an action plan to save the economic viability of our community and city. Start and support Black businesses. Black business owners must deliver superior products, great customer service at competitive prices. We must re-establishment the black family. We are an African people, we will win. Peace

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