Corus Bank Fails on Condo Loans

CHICAGO, IL - Regulators seized Chicago's Corus Bank Friday, writing the final chapter in the bank's disastrous bet on Florida condos. MB Financial Bank of Chicago took over Corus' 11 branches and $3 billion in cash and securities. Two other banks also failed, bringing the total so far this year to 91.

That leaves the Federal Deposit Insurance Corporation (FDIC) with about $4 billion in damaged assets, which the agency hopes to sell within the next 30 days. The total includes about $1 billion worth of construction loans in South Florida, most of them on condominium towers that have been sitting idle in the moribund real estate market.

Corus' failure is another indication that smaller and mid-sized banks are still suffering as commercial loans and mortgages go south. Corus is the sixteenth bank to fail in Illinois this year.

The Corus Bank branches will reopen on their next normally scheduled business day as branches of MB Financial Bank. Depositors of Corus Bank will automatically become depositors of MB Financial Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branches until MB Financial Bank can fully integrate the deposit records of Corus Bank.