* 1:19 pm - If this Crain's scoop stirs up a feeding frenzy, it could impact the Senate race. If not, then it may not make much difference to the campaign. Time will tell, but it ain't great news for Giannoulias, that's for sure…
Broadway Bank, the troubled Chicago lender owned by the family of Illinois Treasurer and U.S. Senate candidate Alexi Giannoulias, has entered into a consent order with banking regulators requiring it to raise tens of millions in capital, stop paying dividends to the family without regulatory approval, and hire an outside party to evaluate the bank's senior management.
The Jan. 26 consent order with the Federal Deposit Insurance Corp. and the Illinois Division of Banking comes less than a week before Mr. Giannoulias, Broadway's chief lender until 2004, must face voters in the Democratic primary for the Senate seat previously held by President Barack Obama.
He's faced criticism, principally from former city Inspector General David Hoffman, who's running against him, for his past role at the bank and the $70 million in dividends the family took out of the bank in 2007 and 2008 as the real estate crisis was becoming apparent. […]
Among the ways to restore the bank's fiscal health, the order lists "the direct contribution of cash by the directors and/or shareholders of the bank." The Giannoulias family owns 100% of the bank's shares.
David Hoffman response in five, four, three, two…
* 1:33 pm - Flashback, from the 10/25/04 edition of Crain's…
Broadway "knows what deals are solid or not solid." Alexi Giannoulias said of Broadway Bank's loan portfolio that the bank knew what it was doing. His father had been in the real estate business since the 1950s, when he started as a developer of shopping centers and banquet halls around the city. Giannoulias said, "He knows what deals are solid or not solid, what areas are hot or not hot."
Oof.
More…
Broadway held almost twice the percentage in high-risk development loans as similar-sized banks. In 2004, Broadway Bank had bet heavily on Chicago's then-uninterrupted commercial real estate boom. Of the bank's $409 million in outstanding loans, 23 percent were to customers in the construction and land development industries, according to Federal Deposit Insurance Corp. (FDIC) reports. By comparison, ShoreBank and Lakeside Bank, both Chicago institutions of similar size, each had roughly 14 percent of their loans in construction and land development.
ShoreBank, of course, is now in big trouble. So, it's more conservative style back then didn't help it much.
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