Federal regulators have shut down the bank owned by the family of Alexi Giannoulias, the Democrat running for President Barack Obama's former Senate seat.
"This is a difficult day for bank employees, for my family, for this community and for all those who built businesses and protected their savings with the help of this bank," said Giannoulias' brother, Demetris Giannoulias, in a written statement. "We fought to carry out the vision my father had when he founded Broadway Bank 30 years ago, but our bank -- like many businesses -- has struggled during these challenging times. There are thousands of small banks at risk in this country and we hope they can remain in operation to help rebuild our economy."
On its website, the Federal Deposit Insurance Corporation said that all of Broadway's deposits had been assumed by another Chicago bank, MB Financial. [Full Press Release]
"There is no need for customers to change their banking relationships to retain the deposit insurance coverage. Customers should continue to use their existing branch until they receive notice from MB Financial bank," said FDIC spokesman Rickey McCullough.
With the takeover, employees of the bank immediately became employees of MB Financial, McCullough said.
His opponent in the race, Rep. Mark Kirk, has made the bank's financial troubles a main point of his campaign.
"While years of risky lending schemes, hot money investments and loans to organized crime led to today's failure, it's a sad day for Broadway Bank employees who may lose their jobs due to Mr. Giannoulias' reckless business practices," a campaign spokeswoman said.
Earlier Friday, a worker at the main Broadway Bank, at 5960 N. Broadway, said "it's over" and black curtains were put up to block views inside.
The Giannoulias campaign said the curtains were to "block the sun," although the sky was overcast and rain is predicted all weekend.
One bank customer, Connie Richardson, who said she came to check on her CD, was told "it's changing hands."
At that time, the bank wouldn't tell her who the new owners would be.
"It's a sad day," Richardson said. "They're like family."
One worker was seen walking out of the building with a box of belongings.
On a lighter note - with all of the media circling Broadway Bank, the Dominicks across the street sent a deli worker over with samples of her five dollar meatloaf for hungry reporters.
Broadway Bank was heavy into real estate loans and lost $75 million last year. Regulators had given it until Monday to raise about $85 million in new capital.
Broadway was one of seven banks statewide seized by the FDIC Friday. Others included Amcore Bank, Citizens Bank & Trust Co., Peotone Bank and Trust Co., Wheatland Bank of Naperville, Lincoln Park Savings Bank and New Century Bank. Customers accounts are insured by the FDIC up to $250,000.