"Whole-Bank" Acquisition on a Deadline

• Client: Republic Bank of Chicago
• Date: January 2009
• Location: Illinois

Summary:

Schiff Hardin assisted Republic Bank of Chicago in a "whole-bank" acquisition of the failed National Bank of Commerce of Berkeley, Illinois from the Federal Deposit Insurance Corporation (FDIC) as Receiver. This was the first such transaction of 2009.

National Bank of Commerce had held a substantial amount of preferred stock in Fannie Mae and Freddie Mac, the government-sponsored institutions charged with providing liquidity in mortgage markets. With the financial turmoil of Fall 2008 and the federal government's takeover of Fannie Mae and Freddie Mac, that stock lost almost all its value, placing the bank in an untenable capital position.

Our attorneys assisted Republic Bank of Chicago in acquiring the bank on an extremely short timeline - the client informed us of its winning bid on a Tuesday, and the Purchase and Assumption Agreement was signed that Thursday. The orchestrated closing of the bank by the Office of the Comptroller of the Currency occurred late Friday, followed by the handover to the FDIC and the immediate sale to our client. The bank's facilities opened Saturday morning as branches of Republic, with no interruption in customer service and all depositors fully protected.

This deal was an attractive strategic opportunity for our client, which purchased $366.6 million in assets at a discount of $44.9 million, assumed $402.1 million in deposits, and picked up two new branches in areas contiguous to its present operations.