Hope and Change: ShoreBank Collapses

From The Hill:

ShoreBank, a Chicago-area community lender praised by Democrats, was taken over by the government Friday and its assets sold.

Chicago-area Democrats pushed hard for regulators to extend bailout money to the bank from the government’s $700 billion aid program. The bank was praised by President Clinton and numerous other lawmakers and industry players. The bank was started in the 1970s.

In a statement late Friday, the Federal Deposit Insurance Corporation (FDIC) said it had taken receivership of the failed bank. Urban Partnership Bank, also in Chicago, will take over the deposits and the 15 branches.

ShoreBank had roughly $2.2 billion in total assets and $1.5 billion in deposits, according to the FDIC.

“In addition to assuming all of the deposits of the failed bank, Urban Partnership Bank agreed to purchase essentially all of the assets except for the marketable securities and fixed assets,” the FDIC said in a statement.

The bank was the midwest part of ShoreBank Corporation, a parent company with pacific and international arms. “This is an important positive outcome for these communities,” said Mary Cahillane, chairman of ShoreBank Corporation. “While our preference would have been to recapitalize and continue ShoreBank’s Midwest bank, we are delighted that the communities that bank served so well for so many years will have access to a dedicated, high quality, full service community bank, led by a highly qualified management team.”

Rep. Jan Schakowsky (D-Ill.), and several other Democrats, pleaded with the Treasury Department to help the bank.

Read the whole thing here.