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Corus Bank Is Shut Down, Cost To DIF: $1.7 Billion

Tyler Durden's picture




 

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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Fri, 09/11/2009 - 19:51 | 66980 Lothar the Rott...
Lothar the Rottweiler's picture

Gawd I hope Marla is spinning tonight.  I need some relief from this insanity.

Fri, 09/11/2009 - 20:05 | 66995 MinnesotaNice
MinnesotaNice's picture

I'm all for that... how is your string theory reading going...

Fri, 09/11/2009 - 20:29 | 67018 D.O.D.
D.O.D.'s picture

Wait I thought string theory has been rendered obsolete in favor of M theory....CB?

Fri, 09/11/2009 - 20:41 | 67035 MinnesotaNice
MinnesotaNice's picture

He's is probably out for the night in Europe...

Fri, 09/11/2009 - 20:49 | 67041 VegasBD
VegasBD's picture

M theory IS string theory isnt it?

Fri, 09/11/2009 - 20:59 | 67053 MinnesotaNice
MinnesotaNice's picture

Yes, an extension of string theory with 11 dimensions...

Fri, 09/11/2009 - 21:28 | 67099 Hephasteus
Fri, 09/11/2009 - 21:54 | 67136 MinnesotaNice
MinnesotaNice's picture

Funny... I wish ZerOhead was here to see it... that darn cat... he would enjoy that picture.

Fri, 09/11/2009 - 22:58 | 67231 Howard_Beale
Howard_Beale's 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.

Fri, 09/11/2009 - 23:02 | 67235 MinnesotaNice
MinnesotaNice's picture

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.

Fri, 09/11/2009 - 23:10 | 67241 Howard_Beale
Howard_Beale's picture

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.

Fri, 09/11/2009 - 23:37 | 67279 Anonymous
Anonymous's picture

--CUTE CAT!
Looks like a Maine Coon, or some variation. They are very dog-like. :)

Sat, 09/12/2009 - 03:56 | 67429 theadr
theadr's picture

That's one handsome puddy-cat. Looks tasty :-) -- Stich

Sat, 09/12/2009 - 12:23 | 67647 ZerOhead
ZerOhead's picture

Meeeooowwww!!

And yes that little fu&*ing string was driving me nuts!

Sat, 09/12/2009 - 13:33 | 67721 Howard_Beale
Howard_Beale's picture

He is a full blooded Maine Coon...and a total nut-job.

Sat, 09/12/2009 - 14:18 | 67751 ZerOhead
ZerOhead's picture

6 fingered nutjob! That's 20% more nutjob on a per paw adjusted basis.

Sat, 09/12/2009 - 21:18 | 67951 kujo
kujo's picture

ummmmm...cats

Sat, 09/12/2009 - 21:36 | 67958 ZerOhead
ZerOhead's picture

kujo... what is that in your hand? A giant penis or a chainsaw???

Sun, 09/13/2009 - 14:20 | 68203 ZerOhead
ZerOhead's picture

I hope it's only a chainsaw...

Sun, 09/13/2009 - 14:40 | 68214 MinnesotaNice
MinnesotaNice's picture

You're getting fixated again cat... get your eye back on that tiny piece of lose string that Mr. Beale gave you :-)

Sun, 09/13/2009 - 14:54 | 68221 ZerOhead
ZerOhead's picture

If Minnesota weren't already such a frozen wasteland you know where I'd tell you to go....

Sun, 09/13/2009 - 15:00 | 68224 MinnesotaNice
MinnesotaNice's picture

 

He-he... and if Minnesota is such a frozen wasteland what does that make Canada... maybe you can find it on Wikipedia  :-)

Sun, 09/13/2009 - 15:07 | 68228 ZerOhead
ZerOhead's picture

It makes it where I'd tell you to go. Ha ha ha!

Sun, 09/13/2009 - 15:14 | 68233 MinnesotaNice
MinnesotaNice's picture

 

:-)

Sun, 09/13/2009 - 15:24 | 68235 ZerOhead
ZerOhead's picture

:-)

Fri, 09/11/2009 - 21:02 | 67056 D.O.D.
D.O.D.'s picture

Basically yes, with one added dimension, which is the "M", just thought I would throw in a lil' non-sequiter...

Cheers, ya caught me! =]

Fri, 09/11/2009 - 21:19 | 67077 Anonymous
Anonymous's picture

That "M" is for "Magic" or upside down "W" as in Edward Witten the original physicist who merged various string theories mathematically.

Fri, 09/11/2009 - 23:09 | 67245 D.O.D.
D.O.D.'s picture

I thought it was for Mischief...as in Loki....hmmmm

Fri, 09/11/2009 - 21:21 | 67081 SilverIsKing
SilverIsKing's picture

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.

Fri, 09/11/2009 - 23:39 | 67282 Hephasteus
Fri, 09/11/2009 - 19:59 | 66989 Translational Lift
Translational Lift's picture

Well....that didn't take long....what do we have this week-end   four more to go??

Fri, 09/11/2009 - 21:51 | 67133 straightershooter
straightershooter's picture

We would've closed more had we been able to find suckers, er.... buyers, domestic or foreign.

Love,

Shaved Bear

Fri, 09/11/2009 - 20:02 | 66992 Anonymous
Anonymous's picture

does this now bankrupt the fdic? Will they now have to ask tim for more money/

Fri, 09/11/2009 - 23:18 | 67255 Howard_Beale
Howard_Beale's picture

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.

Fri, 09/11/2009 - 20:07 | 66997 fatboy
fatboy's picture

that's a pretty big bank

Fri, 09/11/2009 - 20:08 | 66998 What_Me_Worry
What_Me_Worry's picture

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.

Fri, 09/11/2009 - 20:15 | 67004 Bearish Spirits
Bearish Spirits's picture

Thank you.  Now I won't have to watch CORS increase 34% in the final 10 minutes of trading.

Fri, 09/11/2009 - 20:26 | 67014 Sardonicus
Sardonicus's picture

no....now you'll have to watch trade back up to and over $1 IN THE PINK SHEETS

Fri, 09/11/2009 - 20:31 | 67020 bonddude
bonddude's picture

+10

Fri, 09/11/2009 - 20:53 | 67046 Bearish Spirits
Bearish Spirits's picture

aaaaaaahhhhhhhhhhhhh!!!

Fri, 09/11/2009 - 20:18 | 67007 Anonymous
Anonymous's picture

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.

Fri, 09/11/2009 - 20:21 | 67009 Anonymous
Anonymous's picture

MB got shanked...

The loss severity on that portfolio should be in the 75% range. 10% loss in MBFI Monday.

Fri, 09/11/2009 - 20:24 | 67010 Anonymous
Anonymous's picture

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?

Fri, 09/11/2009 - 20:25 | 67012 putbuyer
putbuyer's picture

Brickwell Bank down for the count. Whats interesting is

that they were so top-heavy with CRE loans.

Fri, 09/11/2009 - 20:26 | 67013 Anonymous
Anonymous's picture

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?

Fri, 09/11/2009 - 20:30 | 67015 D.O.D.
D.O.D.'s picture

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

Fri, 09/11/2009 - 21:00 | 67037 MinnesotaNice
MinnesotaNice's picture

I hope he wears a flight suit... and has a real big banner... I like big banners...

Fri, 09/11/2009 - 21:05 | 67062 D.O.D.
D.O.D.'s picture

That would be AWESOME!!!!

Fri, 09/11/2009 - 22:16 | 67172 Anonymous
Anonymous's picture

Expect him to pull out the Greek columns again for this one.

Sat, 09/12/2009 - 08:55 | 67508 MinnesotaNice
MinnesotaNice's picture

Oh, good idea, I hope he saved those from the campaign...

Fri, 09/11/2009 - 21:17 | 67075 Missing_Link
Missing_Link's picture

"Anal nitrate?"  What?  LOL  ...  What a loser.

Fri, 09/11/2009 - 20:32 | 67022 Anonymous
Anonymous's picture

I'm sure it was a competitive bidding proces for the "remaining assets" - not.....

Fri, 09/11/2009 - 20:41 | 67034 Howard_Beale
Howard_Beale's picture

About Damn time!!!!

Fri, 09/11/2009 - 20:45 | 67038 AndItsGone
AndItsGone's picture

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"

 

 

Fri, 09/11/2009 - 20:56 | 67047 Howard_Beale
Howard_Beale's picture

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.

Fri, 09/11/2009 - 21:15 | 67070 MinnesotaNice
MinnesotaNice's picture

I hope that is not real and someone put that up as a prank... no one can be that ridiculous can they?

Fri, 09/11/2009 - 21:47 | 67127 nopat
nopat's picture

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%.

Fri, 09/11/2009 - 22:22 | 67178 Howard_Beale
Howard_Beale's picture

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.  

Fri, 09/11/2009 - 22:46 | 67209 deadhead
deadhead's picture

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

Fri, 09/11/2009 - 22:49 | 67220 Howard_Beale
Howard_Beale's picture

This is who is calling the shots:

www.paulboretski.com/marlow.htm

Fri, 09/11/2009 - 23:13 | 67249 D.O.D.
D.O.D.'s picture

So much for anonymity... I'd keep an eye out for black cars...

Fri, 09/11/2009 - 23:25 | 67262 Howard_Beale
Howard_Beale's picture

Thanks DOD. I'll tell Paul and Marlow to watch out for them.

Fri, 09/11/2009 - 23:35 | 67276 Howard_Beale
Howard_Beale's picture

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.

Sat, 09/12/2009 - 11:39 | 67608 deadhead
deadhead's picture

great pics and comedy howard....i enjoyed the chuckle.

Fri, 09/11/2009 - 22:19 | 67175 AndItsGone
AndItsGone's picture

Well, Dude, we just don't know.

Fri, 09/11/2009 - 21:22 | 67082 long-shorty
long-shorty's picture

It is incredible how many people think white is black and up is down on the Yahoo boards.

Fri, 09/11/2009 - 21:26 | 67092 E pluribus unum
E pluribus unum's picture

and on Wall Street

Fri, 09/11/2009 - 21:27 | 67098 waterdog
waterdog's picture

I take it that FDIC is covering the leases with its funds.

Fri, 09/11/2009 - 22:23 | 67180 Howard_Beale
Howard_Beale's picture

No, those would be your funds.

Fri, 09/11/2009 - 22:06 | 67151 Anonymous
Anonymous's picture

Will this have any effect on the stock market on monday?

Fri, 09/11/2009 - 23:27 | 67267 Howard_Beale
Howard_Beale's picture

No

Fri, 09/11/2009 - 23:14 | 67250 Anonymous
Anonymous's picture

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...

Fri, 09/11/2009 - 23:21 | 67259 polizeros
polizeros's picture

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.

Fri, 09/11/2009 - 23:41 | 67287 Anonymous
Anonymous's picture

"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. "

Fri, 09/11/2009 - 23:52 | 67296 TomJoad
TomJoad's picture

An entire nation buries it's head in the sand. Audit Schmaudit.

Sat, 09/12/2009 - 00:47 | 67334 Stupid Donkey
Stupid Donkey's picture

So we now have an official mark to market discount over 50%?

Sat, 09/12/2009 - 00:50 | 67335 D.O.D.
D.O.D.'s picture

WAIT WHAT!?! I missed that last part?  Whose contact info?

Sat, 09/12/2009 - 02:01 | 67380 Anonymous
Anonymous's picture

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.

Sat, 09/12/2009 - 04:56 | 67449 zeta
zeta's picture

According to the "Fed" theory, debt is wealth -- the more debt the Government accumulates, the better off we are.

Sat, 09/12/2009 - 08:20 | 67494 bonddude
bonddude's picture

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

Sat, 09/12/2009 - 03:06 | 67409 Anonymous
Anonymous's picture

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....

Sun, 09/13/2009 - 11:08 | 68129 greased up deaf guy
greased up deaf guy's picture

yes. they are now here in socal after taking over wamu. makes me sick every time i see them too.

Sat, 09/12/2009 - 04:53 | 67446 Anonymous
Anonymous's picture

FDIC Q2 report is where?

Sat, 09/12/2009 - 05:04 | 67453 Anonymous
Anonymous's picture

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.

Sat, 09/12/2009 - 05:49 | 67460 j0sh1130
j0sh1130's picture

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.

Sat, 09/12/2009 - 11:41 | 67613 deadhead
deadhead's picture

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

Sun, 09/13/2009 - 17:35 | 68282 j0sh1130
j0sh1130's picture

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?

Sat, 09/12/2009 - 10:35 | 67568 Anonymous
Anonymous's picture

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.

Sat, 09/12/2009 - 13:50 | 67729 Howard_Beale
Howard_Beale's picture

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.

Sun, 09/13/2009 - 17:49 | 68289 MinnesotaNice
MinnesotaNice's picture

I don't think I will be getting any stock tips from you :-)

Sat, 09/12/2009 - 11:59 | 67624 DaddyWarbucks
DaddyWarbucks's picture

Calculated Risk nailed it again.

Do NOT follow this link or you will be banned from the site!