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ShoreBank may close after federal aid refused

ShoreBank Corp., the unprofitable Chicago lender to low-income communities, may be forced out of business after failing to win $75 million of federal bailout funds, three people with direct knowledge of the matter said.

Shorebank’s financial hole deepens

ShoreBank’s capital deficiency worsened in the second quarter, according to newly submitted financial results to regulators, and the Chicago-based lender now needs to raise at least $190 million just to meet targets set out in March by state and U.S. banking regulators.

The South Side bank has arranged a capital infusion of about $150 million from Wall Street investment firms, big banks, insurance companies and philanthropic groups. It’s hoping that private investment will then make it eligible for about $75 million in bailout funds from the U.S. Treasury Department. Get the full story »

Lenders give ShoreBank more time

From Crain’s Chicago Business | The Wall Street firms that have pledged $150 million to rescue ShoreBank have extended their agreements three weeks to give the South Side lender more time to secure government bailout funds.

Illinois Dems back TARP funds for ShoreBank

From | Illinois Democratic Reps. Bobby Rush, Danny Davis, Jesse Jackson Jr. and Jan Schakowsky have asked the Treasury Department to tap remaining TARP funds to help ShoreBank.

ShoreBank still could get TARP funds

From Crain’s Chicago Business | ShoreBank reportedly still could receive TARP funds, though Congress ended the bank bailout program to help pay for financial reform.  Banks that applied before June 25 would still be eligible, according to an unnamed administration official.

Reform bill spares ShoreBank a bailout probe

From Crain’s Chicago Business |  The financial reform bill was stripped of a provision calling for an FDIC examination of all bank bailouts since January 2009, sparing ShoreBank such an investigation.

ShoreBank bailout hits political snag

The bailout of Chicago-based ShoreBank has hit a serious snag as the Federal Reserve and Treasury drag their feet on whether to provide funding to the ailing South Side lender, sources close to the situation say. 

Last month ShoreBank lined up commitments from private sources, including Goldman Sachs, Bank of America, General Electric and Chase, for a capital infusion of about $135 million. That private money was to have made ShoreBank eligible for about $75 million in government funds from the Treasury’s Troubled Asset Relief Program. The bank has needed to raise about $200 million to stave off possible seizure. Get the full story »