By Stuart R. Wahlin
AMCORE Financial, Inc., parent of the former AMCORE Bank, reported Aug. 20 the company had filed a petition the day before in Chicago requesting permission to liquidate its assets under the federal bankruptcy code’s Chapter 11 protection.
April 23, the U.S. Treasury Department’s Office of the Comptroller of the Currency closed seven financial institutions, including the failing AMCORE Bank, which had more than 60 branches throughout Illinois and Wisconsin. The Federal Deposit Insurance Corporation (FDIC) was named the receiver of AMCORE, whose failure was primarily attributed to excessive loans to homebuilders while also trying to increase its presence in the Chicago area.
AMCORE closed 2009 with a loss of more than $200 million, despite urging by federal regulators to improve the bank’s performance. Although AMCORE cut staff and sold 18 branches throughout the region, the bank’s financial outlook did not improve. Prior to its closure, AMCORE was the largest publicly-traded company in Winnebago County.
Branches reopened the following day as Harris Bank, which is owned by the Bank of Montreal Financial Group. Harris agreed to assume AMCORE’s $3.4 billion in deposits, plus $3.8 billion in assets, from the FDIC at a premium of .01 percent. AMCORE’s liabilities reportedly total $75.4 million.
Last month, Harris Vice President of Corporate Communications Jim Kappel told The Rock River Times: “We will be closing 18 former AMCORE branches, mostly in the Chicago area, and centralizing the former AMCORE technology, operations, and corporate support functions to Harris. None of the branch closings are taking place in Rockford.”
AMCORE Financial’s bankruptcy came as a result of defaulting on a line of credit in December from lender JPMorgan Chase & Co., which is claiming $11.9 million, according to the Aug. 19 petition.
The liquidation plan is expected to be announced this week.
From the Aug. 25-31, 2010 issue