Midwest Bank Fails

Midwest Bank could be under the control of federal regulators by end of day Friday. A source close to situation says the FDIC already held an auction for banks fascinating in buying Midwest.

There were10 bidders, but it’s unknown which bank won the bid.

In the quarterly report to the SEC Thursday, Midwest said it did not anticipate to raise adequate capital to stay clear of failing.

The Melrose Park-based bank required $250 million by Thursday. Midwest Bank had $3 billion in assets.

Midwest Bank has 26 branches inside the Chicago location, 5 of that are within the city.

Sources say this bank was a Broadway Bank situation, where they had been investing in all types of properties around the country. Midwest invested solely locally with loans between $250,000 to $1 million.

They say the collapse of Freddie Mac and Fannie Mae combined with collapse of real estate just took them beneath.

FDIC protects deposits up to $250,000, and Midwest currently warned investors with more than that to move their money.

Twenty-one Chicago region banks have failed or been taken over since the beginning of last year.

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