FBOP fails, U.S. Bancorp the buyer

[FarCenter]

By: Steve Daniels Oct. 30, 2009
(Crain’s) — Oak Park-based FBOP Corp., Chicago’s third-largest locally headquartered bank holding company, was seized Friday by the Federal Deposit Insurance Corp.

Minnesota-based U.S. Bancorp is the buyer. With the purchase, U.S. Bank branches in the Chicago area increase from 57 to 87 and deposits grow from $2.4 billion to $5.8 billion, making it the 11th-largest bank in the Chicago area by deposits.

Word of FBOP’s imminent closing was sent by CEO Michael Kelly in an internal memo to bank executives late Friday afternoon, according to a person familiar with the contents of the document.

FBOP locations, including 30 local branches of Park National Bank, will open Saturday as branches of U.S Bank.

The failure of the Oak Park-based bank brings to a close a drama that began more than a year ago, when the federal government seized mortgage giants Fannie Mae and Freddie Mac during the height of the financial panic, wiping out more than $800 million in Fannie and Freddie preferred stock held by FBOP. That put the $18.6-billion-asset bank holding company, owned solely by CEO Michael Kelly, into a capital hole it couldn’t fill.

As the only owner of a bank with $1 billion in book value, Mr. Kelly, 64, was a billionaire on paper just a few years ago, though he didn’t live lavishly and shunned notoriety and press attention.
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The failure of the Oak Park-based bank brings to a close a drama that began more than a year ago, when the federal government seized mortgage giants Fannie Mae and Freddie Mac during the height of the financial panic, wiping out more than $800 million in Fannie and Freddie preferred stock held by FBOP. That put the $18.6-billion-asset bank holding company, owned solely by CEO Michael Kelly, into a capital hole it couldn’t fill.

As the only owner of a bank with $1 billion in book value, Mr. Kelly, 64, was a billionaire on paper just a few years ago, though he didn’t live lavishly and shunned notoriety and press attention.
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