Broadway Bank
See also: Broadway Bank (Illinois)From 2002 to 2006, Giannoulias worked as a senior loan officer and Vice President at Broadway Bank, a community bank founded by his father. When he left the bank in 2006, it was one of the most profitable banks in Illinois. Four years later, on January 26, 2010, Broadway Bank entered into a consent decree with the FDIC that ordered Broadway to increase its capital.ur Two dozen small- to medium-sized banks in Illinois and nearly 200 banks nationwide have failed since the October 2008 economic crash.
Broadway Bank’s struggling financial situation is due to delinquent real estate loans and foreclosed properties. From 2002 to 2006, Broadway’s lending in construction and development loans increased sixfold, to $356 million. During Giannoulias’ tenure, Broadway also increased its brokered deposits, which generally command high interest rates. When Giannoulias left the bank in 2006, brokered deposits made up 80% of all deposits at Broadway. When the housing market crashed in late 2008, commercial real estate loan performance deteriorated and Broadway Bank, which had focused its lending in real estate, suffered.
Nine percent of the value of the bad loans originated while Giannoulias was chief loan officer.:1
At the end of business on Friday, April 23, 2010 (2010-04-23), the Illinois Department of Financial and Professional Regulation, Division of Banking, seized Broadway Bank and appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. The FDIC in turn named MB Financial Bank as the institution receiving Broadway Bank's deposit accounts. The FDIC announced that it and MB Financial Bank would share $878.4 million in losses, for a cost of $394.3 million to the federal Deposit Insurance Fund.ur
Read more about this topic: Alexi Giannoulias
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