Chicago Based Shorebank Fails, Gets Bought By Investors
August 21st, 2010 - 7:36 pm ICT by GDBy Ranjan Bhaduri
Chicago, Aug 21, (THAINDIAN NEWS) ShoreBank, based in Chicago which became popular for giving loans to those customers who would not get loans anywhere else for decades, failed on Friday. It had been going through a bad patch and was trying to stay afloat by raising funds. The assets and deposits of the bank were bought by a group of leading US financial institutions and a number of philanthropic groups. It will resume its operations with the name Urban Partnership Bank. It became the 15th bank in Illinois to fail in 2010. The failure of the bank will cost the Federal Deposit Insurance Corp almost $367.7 million as it is being assumed. The FDIC incidentally said that it got a single bid for the failed bank.
The investors in the renamed entity, Urban Partnership Bank are Bank of America Corp, Goldman Sachs Group Inc, Morgan Stanley, Wells Fargo & Co, Citigroup and some others. Urban Partnership is all set to acquire the $1.54 billion ShoreBank had in deposits and $2.16 billion in assets. While the FDIC will bear 80 percent of the losses the remaining 20 percent will be borne by the rechristened bank. The 15 branches of the bank in areas like Cleveland, Detroit and Chicago will open as usual with the new name.
An earlier First Chicago executive David Vitale who had joined the failed bank recently will act as the new bank’s chairman. Its CEO will be Bill Farrow. Urban Partnership has said that the core activities of the ShoreBank will be retained. The focus of the bank had been on small and midsized entities and lower income group customers.
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Tags: bank of america, bank of america corp, core activities, fdic, federal deposit insurance, federal deposit insurance corp, financial institutions, first chicago, goldman sachs, goldman sachs group, goldman sachs group inc, group customers, income group, morgan stanley, philanthropic groups, sachs group inc, shorebank, stanley wells, urban partnership, wells fargo