By Steve Daniels, Crain Communications, Inc.
Sept. 11, 2009
(Crain’s) — MB Financial Inc. will assume the branches and deposits of Corus Bank, the long-troubled Chicago-based condominium development lender that will be seized at the end of business Friday by federal regulators, according to a person familiar with the matter.
Most of the assets of Corus, made up primarily of delinquent condo loans spread throughout the U.S., will be sold by the Federal Deposit Insurance Corp. in the next few weeks, according to this person. Several private-equity firms and real estate outfits are lined up to bid for those assets, according to numerous published reports.
Chicago-based MB Financial, with more than $8 billion in assets and over 70 branches in the city and suburbs, will add Corus’ 11 branches to its network. It’s also expected to assume less than $1 billion of Corus’ $7 billion in deposits, most of which are high-interest-rate certificates of deposits sold over the Internet.
An MB Financial spokeswoman didn’t immediately return a call seeking comment.
The deal for Corus is a coup for MB Financial CEO Mitchell Feiger, who has been the most aggressive Chicago banker in bidding for the branches, deposits and assets of failed lenders.
While the quality of Corus’ overall deposit base isn’t strong, many of its branch locations are in choice neighborhoods like Lincoln Park, Lakeview and Lincoln Square.
Only a week ago, MB Financial assumed the deposits, branches and assets of failed InBank of Oak Forest, but that lender is a fraction of Corus’ size.
While the writing has been on the wall for Corus for months, its failure marks the end finally for the Glickman family, which until recently owned about half the bank’s stock and effectively controlled the bank and its predecessors since the 1960s.
Robert Glickman, who resigned as CEO earlier this year and has been liquidating his ample stock holdings at well below $1 per share ever since, put the bank on its current course by aggressively lending to developers of splashy, high-end condo projects in some of the country’s hottest real estate markets.
Mr. Glickman gambled that a substantial cash and securities cushion would protect his bank from any real estate downturn, but the current meltdown far exceeded his expectations and made Corus a national poster child for reckless risk-taking in banking.