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From Fox Business News | Fox Business Network reporter Charlie Gasparino says troubled Chicago lender ShoreBank is short about $25 million of the
$125 million they need to avoid an FDIC takeover, but that there is political
pressure being applied that might help ShoreBank.
Get the full story: foxbusiness.com.
By Becky Yerak
| Midwest Bank, a $3 billion-asset lender on the verge of being seized by U.S. banking regulators, acknowledged in a Securities and Exchange Commission filing on Thursday that it’s unlikely to raise the capital it needs to stay afloat.
As recently as a week ago, Melrose Park-based Midwest Banc Holdings had a glimmer of hope that it still might be able to raise the money to meet the demands of a “prompt corrective action” order filed earlier this year by banking regulators.
By Becky Yerak | ShoreBank, the ailing South Side bank, continues to try to raise more than $120 million in capital on its own from new and existing investors, sources familiar with the situation said.
Regulators recently began looking for a healthy buyer for the undercapitalized Chicago-based lender, but it’s racing against the clock to try to raise money to remain independent.
Goldman Sachs, U.S. Bank, Citibank and State Farm are among the new investors that have made tentative commitments.
By Becky Yerak | Midwest
Bank, a $3 billion-asset lender in danger of being seized soon by the
government, has mounted a long-shot effort to remain independent by
filing an application for “open-bank assistance” with U.S. banking
regulators, people familiar with the situation say.
Open-bank assistance hasn’t been used on a widespread basis since the
late 1980s by the Federal Deposit Insurance Corp., which in recent years
has built a large infrastructure to put banks into receiverships and
sell their assets to healthy banks. A major criticism of open-bank
assistance generally is that it benefits shareholders of failing banks.
Former executives James Cayne and Alan Schwartz testify before Congress Wednesday on the reasons Bear Stearns failed. (AP)
By Jim Puzzanghera
| Former executives of Bear Stearns Cos. on Wednesday defended the
investment bank’s practices and said the firm’s collapse was caused by
an unstoppable run fed by rumors as the financial markets began
spiraling downward in 2008.
But under questioning by the federal commission investigating the causes
of the financial crisis, former Chief Executive James Cayne admitted
that the company had taken on too much risk to handle a severe market
disruption it did not see coming.
By Becky Yerak | The Federal Deposit Insurance Corp. began seeking potential bidders late last week for ShoreBank, in case the ailing South Side lender is unable to raise capital on its own, according to sources familiar with the FDIC process.
The FDIC also is seeking a healthy bidder for the assets and deposits of troubled Midwest Bank, a midsized lender based in Melrose Park. It is allowing potential bidders for that more desirable franchise to link bids to ShoreBank, which has lent heavily in more hard-hit areas, sources say.
By Becky Yerak | ShoreBank lost $17.3 million in the first quarter and saw its capital
ratios worsen at a time when it’s trying to raise capital from both
existing and new investors.
The undercapitalized bank, besides hoping to tap such existing investors
as JPMorgan Chase and Citigroup, also wants to try to raise money from
State Farm, which has a tentative commitment. It also plans to hit up such
local institutions as Northern Trust, Wintrust and MB Financial, a
person familiar with ShoreBank’s situation said.
By Becky Yerak |
Lake Forest-based Wintrust Financial, which operates 15 community
banks, said the two failed lenders it bought Friday on Chicago’s North
Side and in Naperville will plug geographic holes.
“Those are two areas we’re not in at this point in time,” Chief
Executive Ed Wehmer said Wednesday in an earnings conference call.
From Crain’s Chicago Business | The Federal Deposit Insurance Corp. has begun soliciting bids for Midwest Bank & Trust Co., signaling that the ailing Elmwood Park-based bank could be seized as soon as May 14.
Get the full story: chicagobusiness.com.
By Becky Yerak | MB
Financial Inc., which last Friday bought its fifth and sixth failed
banks since 2009, said Monday that it has the wherewithal to pick up
more collapsed banks even as it digests newly acquired Broadway Bank and
New Century Bank.
The Chicago-based bank said traditional mergers and acquisitions
involving sounder banks are probably unlikely for the foreseeable
future. It’s safer to stick with deals in which the Federal Deposit
Insurance Corp. shares losses on the collapsed lenders, MB’s chief
executive said Monday.