U.S. regulators close failed Corus Bank with $7 billion in assets to bring 2009 total to 92

September 12, 2009 by · Leave a Comment
Filed under: Bank Failure 

This is the 4th largest bank failure of 2009.   According to the FDIC, Corus Bank will cost their deposit insurance fund $1.7 billion dollars.  Corus Bank had a lot of exposure to commercial real estate and construction loans.  Looks like this was its undoing.  I will be watching as more banks fail to see if we keep seeing more exposure to this type of paper just like in 2008 it was subprime loans and home equity loans.

Reuters, New York – U.S. regulators seized Corus Bank on Friday in the fourth-largest bank failure this year and sold its deposits to MB Financial Bank.  Long controlled by the Glickman family, Chicago-based Corus Bank crumbled under the pressure of bad loans on commercial real estate and condominium developments in Arizona, southern California, southern Florida and Nevada. The seizure of Corus and the failure of two smaller banks announced on Friday brought to 92 the number of shuttered banks in 2009.

Left behind in the wake of Corus Bank were 11 retail branches in the Chicago area, which are expected to reopen on their next business day as branches of MB Financial bank. Depositors of Corus Bank will automatically become depositors of MB Financial.

The Federal Deposit Insurance Corp said MB will assume all of the deposits of Corus Bank and about $3 billion of its assets, leaving about $4 billion in other assets that the agency hopes to later sell in a private placement.

Corus, the depository bank unit of Corus Bankshares Inc, had $7 billion in assets and about $7 billion in deposits as of June 30, the FDIC said.

The agency had spent weeks running separate sales of the deposits and other assets of Corus Bank, a lender specializing in condominium, office, hotel and apartment projects.

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