This sneaky manouvre might put my bankrupt institutions guessing competition out of whack!.I'm calling for a rule change.Also dollar positive/greenshoot. Profits to all.BMD.
Feds seek bids for up to seven local banks, including Amcore By: Steve Daniels March 11, 2010 (Crain's) Federal banking regulators are seeking bidders for as many as seven troubled local banks, including Rockford-based Amcore Bank.
Bids for Amcore are due April 15 to the Federal Deposit Insurance Corp., Crains has learned. Amcore, which has been buried under mounting real estate-oriented loan losses, at yearend had $4.1 billion in assets and 66 branches in northern Illinois and Wisconsin, including 24 in Chicagos suburbs.
If Amcore, which has been trying to raise capital to stave off seizure by the FDIC, can come up with the needed funds before the end of next month, it still could avoid the fate that befell the only other large, publicly traded local bank to fail since the financial crisis erupted in 2008 Chicago-based Corus Bank, which had $7 billion in assets.
A spokeswoman for Amcore declined to comment.
Sources say that the FDIC has begun the process of auctioning up to six other, smaller local banks, but their identities could not be verified. Numerous local banks are undercapitalized as a result of losses on real estate loans. Many of those are under regulatory orders to raise capital and would likely face seizure if they are unable to do so.
One of those is Broadway Bank in Chicago, owned by the family of Democratic U.S. Senate nominee Alexi Giannoulias. Regulators ordered Broadway to raise $85 million or more by the end of next month. In interviews last week, Mr. Giannoulias, who was a Broadway executive until 2006 when he was elected Illinois treasurer, said the $1.2-billion-asset bank is likely to fail.
A spokesman for Broadway said "Were getting real interest from investor groups and this is the first we've heard" about any list of local banks the FDIC is auctioning.
Interest in buying Amcore in a failed-bank transaction is expected to be strong. Chicagos No. 3 bank, Harris N.A., is known to be interested and has talked with Amcore executives in the past about a deal. Private-equity groups that have formed to purchase the assets and deposits of failed banks also are expected to be interested.
A Harris spokesman declined to comment.
Depositors at Amcore and other banks are insured up to $250,000 by the FDIC, so they dont need to worry about the safety about their deposits. In addition, there have been no instances yet in the Chicago area in which the FDIC was unable to find a bank willing to purchase the deposits of a failed lender, so in most cases depositors at failed institutions merely switched banks without losing any money.
In addition, one local bank Lake Forests Baytree National Bank and Trust Co. managed to raise capital even after the FDIC had begun the process of auctioning it. A local investor group pumped more than $14 million into Baytree in late January.
