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Corus Bank is Closed by Regulators, MB Financial Bank Assumes All Deposits

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Corus Bank
After months of news on Corus Bank's financial troubles, Corus Bank was finally closed today. The FDIC arranged for MB Financial Bank to assume all deposits, even those above the FDIC limit. However, MB Financial Bank didn't agree to purchase all of the assets. According to the FDIC press release:
MB Financial Bank agreed to purchase approximately $3 billion of the assets, comprised mainly of cash and marketable securities. The FDIC will retain the remaining assets for later disposition. The FDIC plans to sell substantially all of the remaining assets of Corus Bank in the next 30 days in a private placement transaction.

There had been quite a bit of press on this anticipated split of Corus Bank's assets. As described in this WSJ article, investors are lining up to bid on Corus Bank's condo and other real-estate loans.

There had been concerns that the FDIC would not be able to find a bank to assume Corus's deposits. According to that WSJ article:
Corus's banking franchise hasn't attracted much interest because the lender has only 11 branches and attracts deposits primarily by selling online certificates of deposit with above-market interest rates.

Corus Bank did have a long history of offering very competitive CD and money market rates nationwide. Its money market account and its 6- and 12-month CDs have always been near the top of my weekly rate summaries for the last four years.

I'm going to miss Corus Bank. However, you may want to keep an eye out for what Corus Bank will be offering next week. Failed banks that are taken over will often continue to offer competitive CDs for weeks after the failure. It usually takes a while for the new bank to make changes. New accounts will be under MB Financial Bank, so there will no longer be worries of imminent closure. We saw this happen at IndyMac, WaMu and just recently at Guaranty Bank.

It's nice to see MB Financial Bank assumed all deposits. Unfortunately, MB Financial has not decided on interest rates of Corus Bank accounts. It may decide to lower rates on existing Corus Bank CDs. Corus Bank customers will be free to make a penalty-free early withdrawal.

In addition to Corus Bank, the small Brickwell Community Bank in Minnesota also failed today. Like Corus Bank's closure, all deposits, even those above the FDIC limit, were assumed by another bank.

Update 7:45pm PDT: Venture Bank in Washington State was closed late today by state regulators. The FDIC arranged for First-Citizens Bank & Trust Company, Raleigh, NC, to assume all of the deposits, even those above the FDIC limit. For over a year Venture Bank has operated Venture Bank Direct which has been offering an online savings account and a high yield reward checking account. I noticed First-Citizens Bank offers an e.savings account that can be opened online. However, I wouldn't call this a high yield account. It currently pays only 0.10%. So I don't have much hope that First-Citizens Bank will be maintaining Venture Bank rates.

Below is a summary of today's bank failures:

90th Bank Failure of 2009 (16th in IL)
  • FDIC Press Release
  • Closed Bank: Corus Bank, N.A., Chicago, IL
  • Size: 11 offices, $7 billion in assets, $7 billion in deposits
  • Possible Uninsured Deposits: All deposits transferred, except some brokered deposits
  • Acquiring Bank: MB Financial Bank, N.A., Chicago, IL
  • Rate Changes: MB Financial Bank, N.A. will review rates
  • Estimated Cost to Deposit Insurance Fund: $1.7 billion
  • Financial Ratings: 0 star (lowest) at BauerFinancial, 1 star (lowest) at Bankrate.com
91st Bank Failure of 2009 (3rd in MN)
  • FDIC Press Release
  • Closed Bank: Brickwell Community Bank, Woodbury, MN
  • Size: 1 office, $72 million in assets, $63 million in deposits
  • Possible Uninsured Deposits: All deposits transferred, except some brokered deposits
  • Acquiring Bank: CorTrust Bank, N.A., Mitchell, SD
  • Rate Changes: CorTrust Bank, N.A. will review rates
  • Estimated Cost to Deposit Insurance Fund: $22 million
  • Financial Ratings: 0 star (lowest) at BauerFinancial, 1 star (lowest) at Bankrate.com
92nd Bank Failure of 2009 (3rd in WA)
  • FDIC Press Release
  • Closed Bank: Venture Bank, Lacy, WA
  • Size: 18 offices, $970 million in assets, $903 million in deposits
  • Possible Uninsured Deposits: All deposits transferred, except some brokered deposits
  • Acquiring Bank: First-Citizens Bank & Trust Company, Raleigh, NC
  • Rate Changes: First-Citizens Bank & Trust Company will review rates
  • Estimated Cost to Deposit Insurance Fund: $298 million
  • Financial Ratings: 0 star (lowest) at BauerFinancial, 1 star (lowest) at Bankrate.com
References:

  Tags: Corus Bank

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Comments
10 Comments.
Comment #1 by Anonymous posted on
Anonymous
I, too, will miss Corus. They're CD rates have been among the best I could find.

I will also miss the box of chocolates they sent around Christmas time.

1
Comment #2 by Anonymous posted on
Anonymous
Chocolates at Christmas time? I never received any. You must have been a very good (and profitable) client of Corus!

1
Comment #3 by Anonymous posted on
Anonymous
No more chocolates for me also. Corus was one of the best for rates.
Shame.

1
Comment #4 by scott (anonymous) posted on
scott
Count me as another who will miss them, Have done a number of CDs with them over the years and always got the box of See's chocolates at Christmas. Great CSR and easy to get things done. One of my CDs matured 9/9. A month before CDs mature they send you a renewal notice with a password to log in for instructions. I requested it be closed and put into my Corus MM account. First thing on the morning of maturity it was done and an hour later I deposited a check from the account into my local bank. Not often did banks make it that simple. Only have one CD left there, a 4.65% that matures on 10/13. So no big deal on what they decide to do on rates

1
Comment #5 by Anonymous posted on
Anonymous
Loved the rates and the cust svc. Got the chocolates until last x-mas when I was disappointed they didn't come. Will miss the bank.

1
Comment #6 by Anonymous posted on
Anonymous
It appears that the Bank was in a chocolate business, no wonder went under.

1
Comment #7 by Anonymous posted on
Anonymous
Actually, for me, (I was the first poster above) by consistently having the highest rates and not having to go through a bunch of gimmicks to get them - it created a certain amount of loyalty; yes they are a bank that is in business to make profit, but they seemed to value depositors much more so than other banks.

As far as the chocolates, it was just another way that they ensured I was loyal to them. It worked!

1
Comment #8 by Mary (anonymous) posted on
Mary
Please explain why a North Carolina Bank would assume a Washington state bank. Was the online banking presence that strong? Do they plan to be the next Wachovia?

1
Comment #9 by Banking Guy (anonymous) posted on
Banking Guy
I didn't notice when I wrote this post on Friday, but First-Citizens Bank & Trust Company acquired Temecula Valley Bank in California in July. So they do appear to be trying to expand on the west coast.

1
Comment #10 by Anonymous posted on
Anonymous
I had four CDs, mB said they closed and mailed checks for three today, 9/22, so they say. The fourth, was due to mature on 9/25 so they agreed on 9/21 to deposit into my Corus MM account. Today I asked why they didn't deposit all the closed CD's into my MM, they said one account had my tax ID and the others had my spouses tax ID, so they didn't tie them together, and therefore closed the CD's. Sounded to me, if the tax ID's were the same, they would have kept the CD's in tact. They advised the one that was 4.51% that matures on 9/25, is still earning 4.51 until maturity

1