Breaking News: FDIC Takes Over Butler Bank | People's United To Take Over Deposits
The Massachusetts Division of Banks shut down operations of Lowell-based Butler Bank Friday and appointed the FDIC as a receiver.
Bridgeport, Conn.-based People's United Bank is expected to assume control of the bank's $233.2 million in deposits.
While headquartered in Lowell, the bank had operations in Central Massahusetts. It merged with Marlborough Co-Operative Bank in September 2008.
Butler's four branches (Lowell, Andover and two in Marlborough) were expected to open Saturday for normal business hours under People's United management. People's United owns Worcester-based Flagship Bank, but this acquisition extends its footprint towards Boston.
Losses were recorded at Butler in the last two years. In 2008 the bank had a $14.3 million loss. That improved slightly to a $9.2 million loss in 2009.
The failure of Butler Bank is the first bank failure in Massachusetts since 1994. Bank failures have been a mainstay of the recession throughout the United States, but New England has been relatively immune.
While there have been no outright bank failures in Massachusetts in recent years, community banks have struggled under a depressed real estate market. Medway-based Strata Bank saw its balance sheet hammered by investments in Fannie Mae and Freddie Mac, Lehman Brothers and AIG, which lost value when the financial system collapsed in the fall of 2008.
After a string of losses, Strata was taken over by Middlesex Savings Bank of Natick in July 2009.
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