Two months ago First Chicago Bank and Trust an Illinois-based institution announced they were looking for a buyer, and now their situation has become more desperate. After a slow decline in capital and incline in troubles, the bank called it quits and began the search for someone to take over their assets.
Update: It has been brought to our attention that First Chicago Bank and Trust was actually acquired by Wintrust Corporation’s wholly owned subsidiary bank, Northbrook Bank & Trust Company through the FDIC.
Missing their deadline to raise capital last month, many believe that it is merely a matter of time before First Chicago Bank and Trust will be seized by Federal Deposit Insurance Corp. There has yet to be a bank named as the buyer, but Wintrust Financial Corp. is believed to be a frontrunner.
First Chicago Bank and Trust Timeline
In late 2006 Labe Bank and Bloomingdale Bank and Trust merged in order to increase their assets to over $1 billion. It wasn’t until December 2006 that the bank was officially named First Chicago Bank & Trust.
In late 2010 First Chicago Bank and trust began operating under regulatory scrutiny due to its level of capital filed under loans. It wasn’t until April 2011 that the bank had fallen to “significantly undercapitalized” at which point they were given the deadline of a month to raise the amount needed to be considered “adequately capitalized”. According to the bank’s books it holds approximately $959.3 million in assets with $751 million in loans.
First Chicago Bank and Trust’s key share holder, California private equity firm Castle Creek watched the June deadline come and go with no resolution.
The reason Wintrust is such a strong candidate is due to its history of acquiring troubled banks in the Chicagoland area. According to the Chicago Tribune, “Wintrust has been the most active in picking up failed banks in the Chicago area, folding them into the 15 community banks it owns.”