By Stuart R. Wahlin
April 23, the Illinois Department of Financial and Professional Regulation’s Division of Banking, the U.S. Treasury Department’s Comptroller of the Currency and the Federal Deposit Insurance Corporation (FDIC) closed AMCORE Bank. With more than 50 branches, AMCORE was the largest of seven failing banks halted by federal regulators the same day.
Branches reopened April 24 as Harris Bank, which is owned by the Bank of Montreal Financial Group, after the buyer agreed to acquire AMCORE’s $3.4 billion in deposits and $3.8 billion in assets from the FDIC at a premium of .01 percent.
“To protect the depositors, the FDIC entered into a purchase and assumption agreement with Harris National Association…to assume all of the deposits of AMCORE Bank,” FDIC spokesman Greg Hernandez indicated. “Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage.”
Meantime, customers of the former AMCORE Bank may continue writing checks and using bank-issued debit and credit cards as normal.
Three Amcore executives accepted positions with Savant Capital Management just prior to the bank’s closure. For the time being, other former Amcore workers are still employed, but job losses are expected as Harris takes over operations.
Referring to an April 24 conversation with Harris brass, Rockford Mayor Larry Morrissey (I) reported: “Their commitment is to continue to support this community. Obviously, there’ll be changes. Our commitment, as a city, is to be the best partner that we can to support all the employees that are currently working at Amcore to make whatever transition that will be happening as seamless as possible, and to support the retention of as many jobs as we can in Rockford for the those folks who’ve been here for many years supporting their families.”
AMCORE, which ended 2009 with a loss of more than $200 million, had been the subject of attention by federal regulators urging the bank to improve its performance, which had been hindered by the economic downturn and slumping home sales. Despite cutting staff and selling 18 branches in Illinois and Wisconsin, the bank was unable to turn around the losses it had been experiencing since 2008.
Harris, considerably larger, was not immune to poor economic conditions, either. The bank lost $112 million last year. Meantime, according to ratings issued April 22 by J.D Power & Associates, Harris is below average in the Midwest for customer satisfaction.
AMCORE was the largest publicly-traded company in Winnebago County, with a market share of 35 percent of deposits in Rockford.
From the April 28-May 4, 2010 issue