By Becky Yerak | A deal by Chicago-based Diamond Bank to acquire $252.6 million-asset Downers Grove National Bank has fallen through.

Diamond, which has $305.9 million in assets, has withdrawn its application with banking regulators to acquire Downers Grove, which has branches in Downers Grove, Westmont and Woodridge.

“We’re going to focus on our organic strategy,” Matt Gambs, Diamond
chief executive, confirmed.

Downers Grove had been looking for a buyer, partly as a way to raise
capital. It has faced problem loans and increases in FDIC insurance
premiums. It lost $6.7 million in 2009, compared with a $925,000 profit
in 2008. Its percentage of seriously delinquent loans has grown from 3.1
percent in 2008 to 5.6 percent in 2009.

Gambs, who was part of a group of community bankers who met with
President Barack Obama last December, declined to comment on specific
reasons for the deal unraveling, and James Russ, Downers Grove chairman
and CEO, couldn’t be reached for immediate comment.

In November Russ told the Tribune that Downers Grove’s shareholder base
was aging. At 72, Russ had been at the bank for 36 years but was only
fifth in seniority.