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Corus Bank Is Shut Down, Cost To DIF: $1.7 Billion
The last domino of the big three has fallen: Corus Bank has been seized by the OCC. The bank, with $7 billion in assets and deposits, will transfer $3 billion of its assets to MB Financial Bank and all of its deposits. How nice of the FDIC to stick taxpayers with $4 billion in "assets" and no deposits against them. "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." The cost to the FDIC, pulled straight out of the rose-colored kaleidoscope, will be $1.7 billion.
Full FDIC Press release here:
Corus Bank, National Association, Chicago, Illinois, was closed today by the Office of the Comptroller of the Currency, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with MB Financial Bank, National Association, Chicago, Illinois, to assume all of the deposits of Corus Bank, N.A.
The eleven branches of Corus Bank 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.
This evening and over the weekend, depositors of Corus Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.
As of June 30, 2009, Corus Bank had total assets of $7 billion and total deposits of approximately $7 billion. MB Financial Bank will pay the FDIC a premium of 0.2 percent to assume all of the deposits of Corus Bank. In addition to assuming all of the deposits of the failed bank, 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.
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Gawd I hope Marla is spinning tonight. I need some relief from this insanity.
I'm all for that... how is your string theory reading going...
Wait I thought string theory has been rendered obsolete in favor of M theory....CB?
He's is probably out for the night in Europe...
M theory IS string theory isnt it?
Yes, an extension of string theory with 11 dimensions...
I got your string theory right here.
http://icanhascheezburger.com/2009/01/13/funny-pictures-disturbed-by-the...
Funny... I wish ZerOhead was here to see it... that darn cat... he would enjoy that picture.
I have a cat with a lot of market wisdom.
I've thrown him up on my friend's site:
www.paulboretski.com/marlow.htm
Shameless me...a double post but I want you to see it MN.
I used to have a cat that looked exactly like that... but he was grey... his name was Figaro... what is with those huge furry cats... they have the best personalities... just like dogs... mine used to actually come when I called him... as opposed to sit there and look at me with indifference.
This unit is a cat impersonating a dog completely. He plays fetch...and calls the market. His counseling business is up big in this down market. The last six months he has been on retainer.
--CUTE CAT!
Looks like a Maine Coon, or some variation. They are very dog-like. :)
That's one handsome puddy-cat. Looks tasty :-) -- Stich
Meeeooowwww!!
And yes that little fu&*ing string was driving me nuts!
He is a full blooded Maine Coon...and a total nut-job.
6 fingered nutjob! That's 20% more nutjob on a per paw adjusted basis.
ummmmm...cats
kujo... what is that in your hand? A giant penis or a chainsaw???
I hope it's only a chainsaw...
You're getting fixated again cat... get your eye back on that tiny piece of lose string that Mr. Beale gave you :-)
If Minnesota weren't already such a frozen wasteland you know where I'd tell you to go....
He-he... and if Minnesota is such a frozen wasteland what does that make Canada... maybe you can find it on Wikipedia :-)
It makes it where I'd tell you to go. Ha ha ha!
:-)
:-)
Basically yes, with one added dimension, which is the "M", just thought I would throw in a lil' non-sequiter...
Cheers, ya caught me! =]
That "M" is for "Magic" or upside down "W" as in Edward Witten the original physicist who merged various string theories mathematically.
I thought it was for Mischief...as in Loki....hmmmm
We got a third bank tonight. Venture Bank - $298 million cost to the DIF.
http://www.fdic.gov/news/news/press/2009/pr09170.html
Shoulda gone with the under. I guessed 4. Maybe it's not too late.
Maybe it's a sign.
http://www.youtube.com/watch?v=6YgAw1G-4zY&feature=related
Well....that didn't take long....what do we have this week-end four more to go??
We would've closed more had we been able to find suckers, er.... buyers, domestic or foreign.
Love,
Shaved Bear
does this now bankrupt the fdic? Will they now have to ask tim for more money/
They have been tapping into their line of credit with Treasury for at least 3 weeks. Anyone who says otherwise is not counting or taking the FDIC's accounting measures with credence.
that's a pretty big bank
Lol. How nice of MB to "buy" $3B in cash from them for $3B.
Only $1.7B? I expected that number to be higher than that.
Thank you. Now I won't have to watch CORS increase 34% in the final 10 minutes of trading.
no....now you'll have to watch trade back up to and over $1 IN THE PINK SHEETS
+10
aaaaaaahhhhhhhhhhhhh!!!
The losses are at least $4bn of the bad bank assets they just took. It is absurd for the FDIC to estimate so low and mislead the public.
MB got shanked...
The loss severity on that portfolio should be in the 75% range. 10% loss in MBFI Monday.
MB Financial just bought InBank last week, but that is a very small acquisition in comparison, but still, better than an acquisition by a foreign bank, right?
A quick glance I think shows a Q2 balance sheet for MB as $7b in assets against $6b in liabilities that just jumped to $17b versus just $9 with no level 3 attached.
MBFI is -.52 to $16.51 in after hours.
Are damaged banks being allowed to double in size by assuming just the riches of larger damaged banks?
It's great for the banksters, as not a shot was fired, but will customer service suffer?
Brickwell Bank down for the count. Whats interesting is
that they were so top-heavy with CRE loans.
So MB is saying the customers are worth nothing more
than the amount they have on deposit? A bank customer's
future business now has a value of $0.00?
OMG Green Shoots! No wonder Obama is talking on Monday, does the phrase "Mission Accomplished" come to mind?
Anyways, anyone up for goin gangsta gangsta on wannabe salesmen that have "solved" the market with their "proprietary" computer code, come to Vegas for the traders expo, hit up Thanos and join the afterparty with a bikini calander shoot...LOL!
I'm actually considering going just to punk out a bunch of dorks...just cuz I enjoy being mean to bullshitters; and maybe do some gamblin'...
http://www.youtube.com/watch?v=TvKTeHS0vRQ
I hope he wears a flight suit... and has a real big banner... I like big banners...
That would be AWESOME!!!!
Expect him to pull out the Greek columns again for this one.
Oh, good idea, I hope he saved those from the campaign...
"Anal nitrate?" What? LOL ... What a loser.
I'm sure it was a competitive bidding proces for the "remaining assets" - not.....
About Damn time!!!!
From the Yahoo CORS messageboard (7:57 PM today):
"Thanks for the stock tip. I bought $10,000. I am hoping this is the deal that gets me out of hock. I don't want to loose my house. I just got a notice from the sheriff for public sale and I am not working"
LMAO....oh I just love this shit. OK, that was mean. I am truly sorry for that person. But if they had $10000, they shoulda paid the mortgage.
I hope that is not real and someone put that up as a prank... no one can be that ridiculous can they?
Yes, someone can be that ridiculous, no, it's not real. It's an old meme on the Yahoo Boards started (unless I'm corrected) during the Lehman Bros firesale weekend. Friday 3:55 some unsuspecting chap puts the barn up in hock as his all-in nestegg diceroll, wakes up Monday morning in a bathtub full of ice, ass sore, and missing a kidney.
Kind of one of those inside EMH jokes that cause college finance professors to throw their hands up in the air over fund manager returns while their students get fleeced for 3%.
Excellent post nopat and I hope you are indeed correct....that way I am back to my level of happiness that CORS is gone. It just took way too long and was criminal that is was not shut down sooner. It just shows the wishful thinking of Sheila Bair is bordering on criminal when capital ratios are flat out illlegal for months and months. The FDIC is out of control in terms of trying to keep things calm..as oxymoronic as that sounds it is the truth. And our bill as taxpayers just gets worse and worse.
I have a sneaking suspicion that Sheila Bair ain't callin' the shots at FDIC. The Executive Order 12631 team and the rabbit holers summers and rahm are running those calls
This is who is calling the shots:
www.paulboretski.com/marlow.htm
So much for anonymity... I'd keep an eye out for black cars...
Thanks DOD. I'll tell Paul and Marlow to watch out for them.
BTW DOD, I have built over 100 websites....anonymity is still reigning. I just figured my actor friend could handle it and he gave his consent. But hey, I could have put it on my own site--but that would be ridicuous for a cat that has outstanding market sense. And for those black cars, not big in Canada. One question DOD, did you sign the petition? FYI, I haven't yet.
great pics and comedy howard....i enjoyed the chuckle.
Well, Dude, we just don't know.
It is incredible how many people think white is black and up is down on the Yahoo boards.
and on Wall Street
I take it that FDIC is covering the leases with its funds.
No, those would be your funds.
Will this have any effect on the stock market on monday?
No
Regarding those leases, the acquiring institution assumes the lease but has legal recourse to dump those. Similar happend in Texas, when Guaranty Bank failed 2-3 weeks ago and BBVA bought the remnants...there is a fairly new Guaranty branch down the street that seems to be 'available'.
Regarding the deposit premium that is being paid, that is just a sad indictment of what the louts at Corus Bank did. Even in a liquidation P&A, a premium of 1-2% should be possible. In healthier times, the deposit premium can range between 3-4%.
Those 'crap' assets the FDIC will be selling after the fact likely includes some vacant condo towers in Miami or South Beach...
Anyone catch that SEC inspector saying he'll recommend that competent people be sent out next time and that maybe they should do random checks on trades. Gee, you mean like auditors always do as a matter of routine?
It only took him 8 months to determine all of this.
"The Double Dip Recession, or the “W” shaped recovery that a minority of economists, such as Joseph Stiglitz, is now stating as a strong possible outcome of this current rally, should not be discussed in the realm of economics but rather in the more apropos realm of financial fraud. The fact that the upleg of the “W” shaped recovery that is occurring now will inevitably crumble in spectacular fashion will not be a result of any free market principle, but rather the direct consequence of a fraudulent scheme executed by an elite global financial oligarchy, otherwise known as Central Banks. "
An entire nation buries it's head in the sand. Audit Schmaudit.
So we now have an official mark to market discount over 50%?
WAIT WHAT!?! I missed that last part? Whose contact info?
There is the string theory.
There is the M theory - which extends the string theory into 11 dimensions.
Then there is the FED theory - which attempts to quantify the cumulative effects of pushing on a string in 11 dimensions.
According to the "Fed" theory, debt is wealth -- the more debt the Government accumulates, the better off we are.
OK, where was that link of Pete McCloskey saying the same thing to this guy interviewing him
and burning his ass? Then he tells the guy to "get the hell out of my office".
Hilarious.
Did I see that on ZH?
"DEBT IS WEALTH" snicker
is anyone seeing chase for the first time in his market? it is growing up like weeds in metro-atlanta...i get sick every time i pass one of those branches....my guess is that it is positioning itself for wachovia's (wells) fall next month...i see it as a vulture swirling a dead carcas....
yes. they are now here in socal after taking over wamu. makes me sick every time i see them too.
FDIC Q2 report is where?
The government should put all the seized collateral together and pool them. Then they should use the pools as payment to the Congressmen, Senators, BHO and bureaucrats that work for the government. Since they are the ones that did not do their job and they think that there are mature shoots everywhere, they should put their money where their mouths are.
wait. so the FDIC is forecasting a 58% recovery on the assets? with most fo those assets being CRE/development loans I am extremely interested in seeing what these assets actually sell for. i was thinking recovery would be closer to 20-25% for corus. this will be interesting. please, zerohedge, keep us updated on the FDIC sale of the corus assets.
TD has published the recovery rate date published by the fdic. one manner in which you can do it is get an email subscription from the fdic at fdic dot gov.....there is a lot of crap that comes out, but at least you'll get their news that is public
ill look into that/monitor it. is it clearly indicated what assets are what? so ill easily be able to pick out the Corus assets v the other shit they are selling?
Last friday I closed my corus cd (about 100k). I deposited the corus check for the 100k into MB Financial last friday as well! I wonder what would have happened to that 100k if it were deposited in another bank? I personally have had now 5 banks that have been closed by the FDIC. This is really freaking me out.
MB was rated D+ by Weiss before it bought Cors. Mind you Cors was rated E- (the lowest) since the 4th quarter of last year. I would find a safe bank so you can stop freaking out. There are a few left in Illinois. http://www.thestreet.com/bank-safety/index.html?src=ratingsindex&tab=3 . Put in your state and A for the rating--you have a few choices but not many. These ratings are from Weiss who is one of the best bank analysts I know of.
I don't think I will be getting any stock tips from you :-)
Calculated Risk nailed it again.