Posted on 08/20/2010 5:48:15 PM PDT by STARWISE
Federal regulators on Friday seized ShoreBank, the fabled South Side bank known for its community lending, and turned its good assets back over to its management team to be reopened as Urban Partnership Bank.
The management team, which had joined ShoreBank only recently and which sources say includes former First Chicago Corp. executives Bill Farrow and David Vitale, entered into an agreement -- called a loss-share transaction -- on $1.41 billion of ShoreBank¹s assets with the Federal Deposit Insurance Corp. (FDIC), according to a press release issued tonight.
The 15 branches of ShoreBank wll reopen Saturday as branches of Union Partnership Bank.
Urban Partnership Bank "has indicated that they will maintain ShoreBank's focus of providing loan and deposit products and services to individuals and small- to mid-sized businesses, with a special emphasis on the underserved" neighborhoods, according to a fact sheet issued by the FDIC.
The buyout team agreed to pay a 0.5 percent premium for the bank's $1.54 billion in deposits. The team acquired most of ShoreBank's $2.14 billion in assets.
The FDIC received no other bid. The FDIC estimated that the cost of the deal to its insurance fund is $367.7 million, but that the transaction saved its insurance fund $250 million to $334 million over a liquidation.
The reinvented bank will get a new board of directors.
A report earlier in the day in The Wall Street Journal said that the Federal Deposit Insurance Corp. could sell so-called "clean assets" to the new ShoreBank executives and strip out the bad loans.
The 15 branches of ShoreBank will reopen Saturday as branches of Urban Parntership Bank, including those in Detroit and in Cleveland. Depositors of ShoreBank may continue to write checks and use ATM and debit cards as usual.
The new bank managers are backed by major banks, philanthropic institutions and financial corporations. Among them are major banks that had already agreed to provide up to $150 million to rescue ShoreBank.
Another $75 million in anticipated funding never materialized from the federal government¹s bank bailout funds.
The "significant" investors in Urban Partnership Bank include Harris Bank, American Express Co., Bank of America, Citigroup, the Ford Foundation, GE Capital Equity Investments, the John D. and Catherine T. MacArthur Foundation, JP Morgan Chase, Key Community Development Corp. Morgan Stanley, Northern Trust Corp., PNC Investment Corp., State Farm Mutual Automobile, the Goldman Sachs Group and Wells Fargo & Co.
ShoreBank is an institution in its South Shore neighborhood, having become renowned nationally for its support of low-income borrowers.
The bank lost $39.6 million the first six months of this year, and lost $119 million in all of 2009, partly due to bad loans to apartment buildings with five or more units, according to a report the bank filed with regulators.
Jeeze ..look at this:
Regulators shut big Chicago-based bank
Excerpt:
In an unusual move, the FDIC allowed some of ShoreBank's executives to continue running the restructured bank. Executives who joined ShoreBank recently, as the bank struggled to raise capital, will manage Urban Partnership Bank.
These managers "did not contribute to the bank's problems," the FDIC said. ((I'll bet they were just placed there by the O-Machine.))
ShoreBank lost $39.5 million in the second quarter amid soured real estate loans. The bank had been under a so-called "cease and desist" order from the FDIC for more than a year, requiring it to boost its capital reserves. ShoreBank was able to raise more than $146 million in capital this spring from several big Wall Street institutions.
Members of the newly chartered Urban Partnership Bank include Goldman Sachs Group Inc., Citigroup Inc., Morgan Stanley and Wells Fargo & Co. The MacArthur Foundation also owns a share, the FDIC said.
The FDIC and Urban Partnership Bank also agreed to share losses on $1.41 billion of ShoreBank's loans and other assets.
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Same place, new name ... unreal. These cretins are beyond shame. They just have too many plans for this institution for their 'green' economy jobs and slush funds to let it die as it should have.
So the obamma Feds just put all the bank’s bad money onto the taxpayers, but gave all the back’s good money back to the same nmanagement team? Something isn’t right here?
Might as well name the entire country Goldman Sachs and be done with it.
Isn’t SHore Bank the bank for Chicago’s MAFIA??
** Ping !
take over or cover up?
TOTAL scam and coverup.
pardon me while I throw up
Both. (Fox) Take it over (guarding) so you can cover up (hen house). This is so obvious it stinks.
well here’s another one for ya’- i live in Vermont and there was a fairly large bank called “Chittenden Bank” (for Chittenden Co in Vt) NOW it’s called PEOPLE’S UNITED BANK classifying itself as the largest bank in New England
Yeah, but G/S got tax dollars to do the deal.....I just hope there's not an illegal conversion of federal funds going on here (/snix).
Liberals organized, infiltrated key choke points in the country, wrested control, and now appoint only their own to boards in a perpetuating manner.
The only thing that will change it are bullets. Elections? You’re kidding me?
“Urban Partnership Bank” - codewords in play.
Black Liberation Theology applied again by the regime.
I suppose they called it that because Tyra Banks was already taken.
And we all know what "community lending" means.
Might as well name the entire country Goldman Sachs and be done with it.
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Ain’t that the truth ..
More commie lingo, "underserved neighborhoods".
More commie lingo, “underserved neighborhoods” = social justice
Nanzi big bucks must be beside herself, she
with the .. pole vault in, thru the fence,
parachute over .. to get their damn commie way.
http://www.youtube.com/watch?v=imUyBlc7NHQ
DAMN THEM ALL! VOTE THEM ALL OUT !!
The bank lost $39.6 million the first six months of this year, and lost $119 million in all of 2009, partly due to bad loans to apartment buildings with five or more units, according to a report the bank filed with regulators.
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