Parkway Terminates Planned Purchase of Chicago’s Park Bancorp

Parkway Bancorp in Harwood Heights, Ill., no longer plans to buy Park Bancorp in Chicago.

Park, the parent of the $146 million-asset Park Federal Savings Bank, said in a press release Friday that it had received notice that Parkway was set to terminate a deal announced in May.

Park's release did not provide a reason for the termination, noting only that the company "will continue to seek other strategic alternatives in an effort to recapitalize" its bank. Park Federal lost $1.7 million through the first nine months of this year, based on its call report with the Federal Deposit Insurance Corp.

Parkway, the parent of the $2.3 billion-asset Parkway Bank & Trust, had agreed to pay 25-35 cents a share for Park, based in part on the seller's operating losses.

"The board believes this is a great opportunity for the bank to be a part of an organization with considerably deeper resources, operational scale and a steady stream of core earnings," David Remijas, Park's president and chief executive, said when the deal was announced.

Park hired Keefe, Bruyette & Woods in 2011 to help it explore its strategic options, including a possible sale. At that time, the company was dealing with a series of challenges, including a cease-and-desist order that required it to provide a capital and business plan for 2011 and 2012.