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Material Loss Review Of Benchmark Bank, Aurora, Illinois

Sunday, June 20, 2010 - 11:26 AM
Benchmark Bank in Illinois was closed by regulators on December 4, 2009. The FDIC Office of Inspector General completed its Material Loss Review last week. Below is an excerpt:
Benchmark failed because its Board and management pursued a strategy focused on CRE [commercial real estate] and ADC [acquisition, development, and construction] lending and did not adequately manage the risks associated with the resulting CRE and ADC concentrations. Management increasingly relied on non-core funding to fund the CRE and ADC loan growth, especially brokered deposits and higher-cost Internet CDs. The risk management deficiencies, in conjunction with the decline in the Chicago area real estate market in 2007, led to significant losses in the loan portfolio, which depleted earnings and eroded capital. The Board was unsuccessful in its attempts to raise adequate capital to sustain the bank’s operations, and the IDFPR closed Benchmark on December 4, 2009 due to lack of capital.

Link to Material Loss Review (pdf)

Link to review of Benchmark Bank's failure
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Ken TuminKen Tumin5,472 posts since
Nov 29, 2009
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