Corus Bank Finally Fails

CHICAGO (TheStreet) -- Corus Bank NA was finally shut down by the Office of the Comptroller of the Currency late Friday, ending a long slide for the condominium lender and bringing the total of failed banks and thrifts this year to 90.

The Federal Deposit Insurance Corp. was appointed receiver of Corus, a subsidiary of Corus Bankshares (CORS), and sold all of the bank's deposits to MB Financial Bank, a subsidiary of MB Financial (MBFI). Corus's eleven branches were set to reopen during normal business hours as branches of MB Financial Bank.

The acquisition was MB Financial's second in a week, following its takeover of the failed InBank of Oak Forest, Ill.

Corus had about $7 billion in total assets and $7 billion in deposits. In addition to the deposits and branches, MB Financial Bank took over about $3 billion in deposits. The FDIC said it expected to sell most of the remaining assets in a private transaction over the next 30 days, and estimated the cost to the deposit insurance fund would be $1.7 billion.

The OCC's action followed a published New York Times report published Thursday, saying that the FDIC was looking to make separate deals to sell Corus's deposits and loans.

TheStreet.com has covered the Chicago lender's declining loan quality and dwindling capital since August 2007, when Corus Bancorp's capital position seemed threatened after the holding company paid out a special dividend of $1 a share, while problems were mounting in the bank's condominium construction and conversion portfolio.