Landmark CDFI Is Among Eight More Bank Failures

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CHICAGO – ShoreBank, a nationally known community development bank that helped mold the Treasury Department’s Community Development Financial Institutions program 12 years ago, was shuttered by regulators Friday, one of eight bank failures.

In an unusual agreement, investors in $2.2 billion ShoreBank were allowed by the FDIC to retain some of the failed bank’s holdings as a newly chartered CDFI called Urban Partnership Bank. ShoreBank, Illinois’ 15th bank failure this year, was founded in 1973 and based on Chicago’s South Side.

ShoreBank recently had raised more than $145 million from firms including Goldman Sachs Group Inc., General Electric Co., JPMorgan Chase & Co., and Citigroup Inc. Those funds will be placed into the new bank.

The other Friday closings – making a total of 118 failures for the year – were: $870 million Los Padres Bank, Solvang, Calif.; $499 million Butte Community Bank, Chico, Calif.; $471 million Pacific State Bank, Stockton, Calif.; $337 million Sonoma Valley Bank, Sonoma, Calif.; $68 million Independent National Bank, Ocala, Fla.; $68 million Community National Bank at Bartow, Fla.; and, $9 million Imperial Savings and Loan Association, Martinsville, Va.

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