Friday, August 20, 2010

ShoreBank execs ready to relaunch lender with new name

ShoreBank management have presented a bid to federal regulators for some of the performing loans and deposits of the failing Chicago lender that could lead later today to the creation of a bank with a new name that would continue lending in ShoreBank's South and West Side markets, as well as Cleveland and Detroit, according to people familiar with the matter.

While the ShoreBank name is expected to go away, it couldn't be learned what exactly the new moniker will be. One source said it was likely to include the word “Urban.”
Management of ShoreBank, led by former First Chicago Corp. senior executive David Vitale, has lined up most of the Wall Street and other investors that had committed $150 million in the spring to try to save the bank from failure to back a bid for some of ShoreBank's assets and deposits, according to people familiar with the matter. The Federal Deposit Insurance Corp. is expected to seize the bank later today.

If no other surprise bidders have emerged, the management team is expected to acquire some of the bank's deposits and good loans in order to continue ShoreBank's mission of lending in low-income urban neighborhoods avoided by other banks. Mr. Vitale, who agreed to try to save ShoreBank in the spring and is executive chairman, will continue to run the lender.

If the bid is successful, the bank will be limited to its Chicago branches and its smaller operations in Cleveland and Detroit, according to a source.
There you have it, ShoreBank is expected to be seized by the FDIC today. Although in some minor way this bank will survive, but not in the same form that we have known it.

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