Chicago : Ravenswood Bank fails, Wintrust unit is the buyer

(Crain's) — Ravenswood Bank on Friday became the 23rd Chicago-area bank to fail since the financial crisis began claiming local banks at the start of 2009.

A unit of Lake Forest-based Wintrust Financial Corp. purchased most of the assets and deposits from the Federal Deposit Insurance Corp.

Ravenswood, which was launched in 1996 during a wave of bank startups, had $264 million in assets and $269 million in deposits as of June 30. In addition to its main office on the Northwest Side, it has a branch in northwest suburban Mount Prospect.

Wintrust said it paid a 0.9% premium for $120 million in non-brokered deposits. Wintrust said it acquired a total of $190 million in assets at a discount of 12.6% and agreed to share losses with the FDIC on $161 million in Ravenswood's loans.

For $12.8-billion asset Wintrust, whose franchise is overwhelmingly suburban, the deal will give it another location in the city, a market it only recently entered through the purchase of failed Lincoln Park Savings Bank.

Ravenswood Bank succumbed to the same reality that has tripped up many of Chicago's smaller banks: an over-reliance on real estate lending. As of June 30, 40% of its loans were to commercial and residential developers or to investors in commercial real estate.

Branches of Ravenswood Bank will open Saturday as branches of Northbrook Bank & Trust Co., one of Wintrust's many Chicago-area banks.

The FDIC estimates the loss to its insurance fund from Ravenswood's failure will be $68 million.