Canadian Banks Seize Potential Via U.S. Failures

Regulators have seized seven banks in Illinois with a unit of Bank of Montreal assuming the assets and liabilities of the largest institution, and marking the second time in as many weeks that a Canadian bank has made headway into the U.S. market via this country’s bank failures.

U.S. bank collapses, fueled by faltering real estate loans, is up to 57 this year.

The Bank of Montreal’s Harris Bank unit was named receiver of Amcore Bank of Rockford, Illinois, with 52 branches. Amcore had about $3.8 billion in total assets and $3.4 billion in total deposits.

It was closed by the Office of the Comptroller of the Currency and turned over to the Federal Deposit Insurance Corp., which entered into a “loss-share” agreement with Harris. Under the agreement, the FDIC will cover 80 percent of future loan losses from the Amcore portfolio. Harris already has more than 280 locations across Illinois, Indiana and Wisconsin.

The Bank of Montreal is the fourth largest bank in Canada by deposits.

The FDIC last week announced that Toronto-Dominion, Canada’s No. 2 bank, acquired the assets and liabilities from Riverside National Bank of Florida and two other Florida failed banks. The three banks give TD about 70 branches throughout Florida.

This week’s second largest bank failure was Chicago-based Broadway Bank, with about $1.2 billion in assets and $1.1 billion in deposits. MB Financial Bank took over the branches, deposits and its assets. MB Financial agreed to share losses with the FDIC.

Broadway had been struggling with real estate loans, losing $75 million last year.

In Illinois, the bank is a well-known family-owned lender that helped launch U.S. Senate candidate Alexi Giannoulias’ political career. The bank’s anticipated failure has had an impact on Giannoulias’ Democratic bid for President Barack Obama’s old Senate seat.

Here is a recap from the FDIC of this past week’s seven failures:

• Wheatland Bank, Naperville, IL with $437.2 million in assets and $438.5 million in deposits was closed. Wheaton Bank & Trust, Wheaton, IL has agreed to assume all deposits, excluding certain brokered deposits.
• Peotone Bank and Trust Company, Peotone, IL with $130.2 million in assets and $127.0 million in deposits was closed. First Midwest Bank, Itasca, IL has agreed to assume all deposits, excluding certain brokered deposits.
• Lincoln Park Savings Bank, Chicago, IL with $199.9 million in assets and $171.5 million in deposits was closed. Northbrook Bank and Trust Company, Northbrook, IL has agreed to assume all deposits.
• New Century Bank, Chicago, IL with $485.6 million in assets and $492.0 million in deposits was closed. MB Financial Bank, National Association, Chicago, IL has agreed to assume all deposits.
• Citizens Bank & Trust Company of Chicago, Chicago, IL with $77.3 million in assets and $74.5 million in deposits was closed. Republic Bank of Chicago, Oak Brook, IL has agreed to assume all deposits.
• Broadway Bank, Chicago, IL with $1.2 billion in assets and $1.1 billion in deposits was closed. MB Financial Bank, National Association, Chicago, IL has agreed to assume all deposits, excluding certain brokered deposits.
• Amcore Bank, National Association, Rockford, IL with $3.8 billion in assets and $3.4 billion in deposits was closed. Harris National Association, Chicago, IL has agreed to assume all deposits, excluding certain brokered deposits.