Corus Bankshares
Encyclopedia
Corus Bankshares, Inc. operated as the holding company for Corus Bank, N.A., a United States company that offered consumer and corporate banking products and services. The bank's deposit products included checking, savings, money market, and time deposit accounts. Its loan portfolio primarily comprised commercial real estate loans, including condominium construction and condominium conversion loans; commercial loans; and residential real estate loans. The bank focused its lending activities in various metropolitan areas in Florida and California, as well as in Las Vegas, New York City, and the Washington, D.C. It also provides safe deposit boxes, as well as clearing, depository, and credit services to check cashing industry locations in the Chicago area and in Milwaukee, Wisconsin. As of December 31, 2006, the bank operated 11 retail banking branches in the Chicago metropolitan area. Corus Bankshares was founded in 1958 and is based in Chicago, Illinois. Corus Bank is also known for having a relatively few number of branches for a publicly traded stock.
As of the end of the first quarter of 2008, Corus had a Texas ratio
of 70%.http://www.marketwatch.com/news/story/weekend-edition-bank-failures-surge/story.aspx?guid=%7B2FCA4A0C%2D227D%2D48FE%2DB42C%2D8DDF75D838DA%7D
had fallen to negative $157 million. Normally, banks with negative Tier 1 capital are immediately closed by the Federal Deposit Insurance Corporation
(FDIC).
In mid-August 2009 the bank was named as one of the biggest of more than 150 U.S. lenders which own nonperforming loans that equal 5 percent or more of their holdings. 5 percent is a threshold that former regulators have stated can wipe out a bank’s equity and threaten its survival.
On Friday, September 11, 2009, Corus Bank, N.A., Chicago, IL was closed by the Office of the Comptroller of the Currency
, and the FDIC was named Receiver. MB Financial Bank of Chicago, Illinois assumed all deposits and approximately $3 billion of assets making all depositors of Corus Bank customers of MB Financial. The FDIC estimates the cost to the Deposit Insurance Fund
will be $1.7 billion. A month later, Starwood Capital Group
later purchased at 40% equity share in a portfolio of construction loans and real estate owned
assets formerly held by the bank. The FDIC held the remaining 60% equity share of the $4.5 billion portfolio.
As of the end of the first quarter of 2008, Corus had a Texas ratio
Texas ratio
The Texas ratio is a measure of a bank's credit troubles. The higher the Texas ratio, the more severe the credit troubles.Developed by Gerard Cassidy and others at RBC Capital Markets, it is calculated by dividing the value of the lender's non-performing assets by the sum of its tangible common...
of 70%.http://www.marketwatch.com/news/story/weekend-edition-bank-failures-surge/story.aspx?guid=%7B2FCA4A0C%2D227D%2D48FE%2DB42C%2D8DDF75D838DA%7D
Caught up in the financial crisis
As of August 1, 2009, Corus reported that it was "highly undercapitalized" and in need of government assistance. At the end of the previous quarter, its Tier 1 capitalTier 1 capital
Tier 1 capital is the core measure of a bank's financial strength from a regulator's point of view. It is composed of core capital, which consists primarily of common stock and disclosed reserves , but may also include non-redeemable non-cumulative preferred stock...
had fallen to negative $157 million. Normally, banks with negative Tier 1 capital are immediately closed by the Federal Deposit Insurance Corporation
Federal Deposit Insurance Corporation
The Federal Deposit Insurance Corporation is a United States government corporation created by the Glass–Steagall Act of 1933. It provides deposit insurance, which guarantees the safety of deposits in member banks, currently up to $250,000 per depositor per bank. , the FDIC insures deposits at...
(FDIC).
In mid-August 2009 the bank was named as one of the biggest of more than 150 U.S. lenders which own nonperforming loans that equal 5 percent or more of their holdings. 5 percent is a threshold that former regulators have stated can wipe out a bank’s equity and threaten its survival.
On Friday, September 11, 2009, Corus Bank, N.A., Chicago, IL was closed by the Office of the Comptroller of the Currency
Office of the Comptroller of the Currency
The Office of the Comptroller of the Currency is a US federal agency established by the National Currency Act of 1863 and serves to charter, regulate, and supervise all national banks and the federal branches and agencies of foreign banks in the United States...
, and the FDIC was named Receiver. MB Financial Bank of Chicago, Illinois assumed all deposits and approximately $3 billion of assets making all depositors of Corus Bank customers of MB Financial. The FDIC estimates the cost to the Deposit Insurance Fund
Deposit Insurance Fund
The Massachusetts Depositors Insurance Fund was created by the state government of Massachusetts in response to the large number of Massachusetts bank failures during the Great Depression of the 1930s. This fund was the inspiration for the formation of the Federal Deposit Insurance Corporation...
will be $1.7 billion. A month later, Starwood Capital Group
Starwood Capital Group
Starwood Capital Group is a private investment firm headquartered in Greenwich, Connecticut. The businesses owned by the firm include Starwood Property Trust, Inc., Starwood Energy Group Global, L.L.C., Starwood Real Estate Securities, L.L.C., and SH Group....
later purchased at 40% equity share in a portfolio of construction loans and real estate owned
Real estate owned
Real estate owned or REO is a class of property owned by a lender typically a bank, government agency, or government loan insurer, after an unsuccessful sale at a foreclosure auction. A foreclosing beneficiary will typically set the opening bid at a foreclosure auction for at least the outstanding...
assets formerly held by the bank. The FDIC held the remaining 60% equity share of the $4.5 billion portfolio.