) -- State regulators closed
The Bank of Commerce
of Wood Dale, Ill. on Friday, bringing this year's count of bank failures to 26.
The failed bank had previously been included in
institutions, based on fourth-quarter regulatory data provided by
After the Illinois Department of Financial & Professional Regulation took over The Bank of Commerce,
Federal Deposit Insurance Corp.
was appointed receiver and sold the failed bank's $163.1 million in total assets and $161.4 million in total deposits to
Advantage National Bank Group
of Elk Grove Village, Ill.
The acquiring bank is a subsidiary of
The FDIC agreed to cover 80% of losses on $145.7 million of the assets acquired by Advantage National Bank Group and estimated the cost of The Bank of Commerce's failure to the deposit insurance fund would be $41.9 million.
The Bank of Commerce's office was set to reopen Saturday as an Advantage National branch.
Wintrust CEO Edward Wehmer said in a statement that the government-assisted acquisition of The Bank of Commerce provided "a great opportunity to expand our presence adjacent to the existing communities served by the community bank locations that make up Advantage National Bank Group," and that the transaction would "be accretive to net income and earnings per share."
For many banks acquiring failed institutions with help from the FDIC, the transactions have resulted in large bargain-purchase gains in subsequent quarters.
As part of this latest deal, Wintrust also provided the FDIC with a "value appreciation instrument," consisting of 125,000 units with a strike price of $34. The units can be exercised over the next 180 days.
If the agency exercises, Wintrust will pay the FDIC the average trading price for the two trading sessions previous to the exercise date, minus the exercise price, "but in no case greater than $8.00 per unit. Wintrust's shares closed at $35.00 Friday.
--Written by Philip van Doorn in Jupiter, Fla.
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Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.