ShoreBank of Chicago, Seven Others Shuttered as 2010 Failures Climb to 118

[marmar]

By Dakin Campbell and James Sterngold


Aug. 21 (Bloomberg) -- ShoreBank Corp., the Chicago lender operating under a Federal Deposit Insurance Corp. cease-and- desist order for 13 months, and seven other banks were shut by regulators as 2010 bank failures climbed to 118.

ShoreBank’s 15 branches, including those in Chicago, Cleveland and Detroit, will open as Urban Partnership Bank, according to statements from the FDIC.

“The good news is that the bank, under this new management, will still be there and serving the South Side community,” said Dory Rand, referring to Urban Partnership’s William Farrow. Rand is president of the Chicago-based Woodstock Institute, a non-profit that studies community lending. “They have made the South Side a decent place to live and work and do business.”

Regulators also closed four banks in California, two in Florida and one in Virginia. All eight closures cost the FDIC’s deposit-insurance fund $473.5 million, the agency said yesterday. This year’s bank failures will surpass last year’s total of 140, FDIC Chairman Sheila Bair said last month in a Bloomberg Television interview.

The 15th bank failure in Illinois this year, ShoreBank was founded in 1973 and based on Chicago’s South Side. The lender raised more than $145 million from firms including Goldman Sachs Group Inc., General Electric Co., JPMorgan Chase & Co., and Citigroup Inc., and those funds will now be placed in the new bank, people familiar with the rescue efforts said. ShoreBank had $2.16 billion of assets on June 30. ...........(more)

The complete piece is at: http://noir.bloomberg.com/apps/news?pid=20601087&sid=aE3PB_Q6qoqg&pos=2

[billlll]

1. whoops error

.......Error.

[phasma ex machina]

2. Paying $145M for $2.16B makes for bodacious bankster bonuses. nt