FDIC Sells Stake In Corus Bank Assets

The Federal Deposit Insurance Corp. has agreed to sell a 40 percent stake in a portfolio of Corus Bank assets to a private-equity consortium managed by Starwood Capital Group.

The investor group also includes TPG Capital, Perry Capital and WLR LeFrak.

The FDIC said on its Web site late Tuesday it received eight bids for a stake in the portfolio, which includes construction loans and real estate-owned assets with an unpaid principal balance of about $4.5 billion. It determined that the consortium's bid would result in the greatest return for the agency. The FDIC initially will hold a 60 percent stake in the portfolio.

The agency said it expects the deal to close in mid-October.

Federal regulators in September seized Corus Bancshares Inc., a major Chicago-based lender to condominium, office and hotel projects, adding it to the long list of banks that have succumbed this year to the recession and waves of loan defaults.

The FDIC took over Corus Bank, which had $7 billion in total assets, and $7 billion in deposits. Corus Bank's closure is expected to cost the FDIC $1.7 billion.

Chicago-based MB Financial Inc. took on Corus Bank's deposits, re-opened its branches under the MB Financial Bank name, and agreed to buy about $3 billion of its assets. The Starwood transaction completes the sale of the majority of the remaining assets of Corus Bank.

Ninety-five banks have failed so far this year as losses have mounted on commercial real estate and other soured loans amid the most severe financial climate in decades. That has cost the fund about $25 billion, the FDIC said last week.