Urban Partnership Bank in Bailout Talks With FDIC, Sources Say
Urban Partnership Bank of Chicago is in discussions with the FDIC on a buyout of two agreements under which the agency shares losses on hundreds of millions of old ShoreBank loans still on UPB's books, according to sources familiar with the matter. Urban Partnership hopes the buyout will allow it to secure enough cash to shore up its capital base. When the FDIC seized ShoreBank and transferred its assets and deposits to newly created Urban Partnership in 2010, the agency agreed to share losses on ShoreBank's commercial and residential loans, an arrangement scheduled to expire Sept. 30 exposing the bank to full future losses. Urban Partnership still has well over $300 million in loans covered by the FDIC agreements.