Inland Bank

Inland Bank
Private Corporation
Industry Banking
Headquarters Oak Brook, Illinois
Website http://www.inlandbank.com

Inland Bank is a U.S. Federal Deposit Insurance Corporation-insured, privately held bank based in Oak Brook, Illinois with $1 billion in assets and $897 million in deposits.[1] The bank is led and majority owned by the Inland Group Chairman Daniel L. Goodwin. [2] Inland has 10 branches in the west suburbs of Chicago.[3] The bank focuses on commercial real estate lending (33% of total assets), commercial and industrial lending (19% of total assets), U.S. government securities (19% of total assets) and residential lending (15% of total assets).[4]

Regulatory Problems Impeded Growth

In November 2012, the FDIC and Illinois Division of Banking reversed a unique arrangement that let the bank appear profitable during the Recession of 2008 by shifting responsibility for losses to an undisclosed sister company owned by Goodwin.[5] Inland Bank submitted bids to the FDIC for multiple banks while the arrangement enabled it to hide losses, and won a 2011 bid for First Choice Bank in Geneva, Illinois.[6] Prior to the regulatory intervention, Inland Bank had tripled in size in five years by acquiring First Choice Bank and banks in Countryside, Illinois and Lake Zurich, Illinois.[7]

An Oak Park-based consultant to community banks at the time told Crain’s Chicago Business that “You don't want outliers with regard to financial institutions. This was an outlier. Regulators just want to know if you're healthy or you're not healthy. . . . Why should (Inland) be treated differently than the other $1 billion-plus banks in the same situation?”[8]

The consent order ending the loss-share agreement[9] also led to Goodwin and other shareholders injecting $30 million in new equity into the bank.[10] Regulators lifted the order in July 2013.[11]

Inland Bank received a total of $731,404 in financial awards from the Treasury Department’s Bank Enterprise Award Program (“BEA”) from 2009 to 2013 while the loss-share agreement and then the consent order were in effect.[12] The Treasury Department has faced criticism concerning whether it was appropriate to reward Inland Bank while it was hiding loses in sister companies and whether Inland Bank should have received a reward for supporting Pan American Bank while both banks were majority-owned by Goodwin.[13]

In October 2014, the Illinois Securities Department issued a subpoena regarding Inland Bank’s transactions with Inland American Real Estate Investment Trust,[14] an investment vehicle tied to Goodwin through the Inland Group.[15] Questions have been raised as to whether Inland American investors unknowingly covered Inland Bank's losses.[16]

Pursuit of IPO

In September 2014, Goodwin announced that he would like to take Inland Bank public when it is three to four times its size and that the bank will pursue acquisitions of smaller banks.[17]

From June 2013 to June 2014, almost a year after the consent order was lifted, Inland Bank’s assets had increased by $6 million but its number of full-time employees decreased from 304 to 263 in the absence of any acquisitions.[18] Loans to businesses had increased to $200 million from $95 million, but real estate loans had decreased to $502 million from $537 million.[19]

Leadership

Inland Bank is led by Goodwin and CEO Howard Jaffe, a former CFO of MB Financial.[20] Goodwin is Chairman and CEO of Inland Bancorp, which wholly owns Inland Bank.[21] The bank’s board of directors includes Inland Group Vice Chairman Robert Baum, who also has an ownership stake in the bank.[22]

Notes

  1. ↑ FDIC_ BankFind. Inland Bank & Trust. Financials. Fdic.gov. June 30, 2014. Retrieved October 2, 2014.
  2. ↑ Annual Report of Holding Companies—FR Y-6 for Inland Bancorp, Inc. (PDF). Chicagofed.org. December 31, 2013. Retrieved October 2, 2014.
  3. ↑ “Ten Chicagoland Locations.” Inlandbank.com. Retrieved October 2, 2014.
  4. ↑ FDIC Key Demographic Information. Inland Bank & Trust. ID Report Selections: Net Loans and Leases, Securities.
  5. ↑ Daniels, Steve. “Regulators may put a lid on Inland Bank’s growth.” November 19, 2012. Chicagobusiness.com. Retrieved October 2, 2014.
  6. ↑ Daniels, Steve. “Regulators may put a lid on Inland Bank’s growth.” November 19, 2012. Chicagobusiness.com. Retrieved October 2, 2014.
  7. ↑ Daniels, Steve. “Regulators may put a lid on Inland Bank’s growth.” November 19, 2012. Chicagobusiness.com. Retrieved October 2, 2014.
  8. ↑ Daniels, Steve. “Regulators may put a lid on Inland Bank’s growth.” November 19, 2012. Chicagobusiness.com. Retrieved October 2, 2014.
  9. ↑ Consent Order FDIC-12-378b. (PDF). Idfpr.com. November 16, 2012. Retrieved October 2, 2014.
  10. ↑ Annual Report of Holding Companies—FR Y-6 for Inland Bancorp, Inc. Chicagofed.org. December 31, 2013. Retrieved October 2, 2014.
  11. ↑ Daniels, Steve. “Regulatory clouds lift on Parkway, Inland banks.” July 30, 2013. Chicagobusiness.com. Retrieved October 2, 2014.
  12. ↑ Award/Allocatee Search Results. Inland Bank. Cdfifund.gov. Retrieved October 4, 2014.
  13. ↑ “Treasury Department Questioned by UNITE HERE over millions in rewards to Illinois banks.” Businesswire.com. July 22, 2014. Retrieved October 3, 2014.
  14. ↑ “UNITE HERE: IL Securities Regulator Subpoenas Records from Inland American.” Businesswire.com. December 1, 2014. Retrieved December 18, 2014.
  15. ↑ Real Estate Investment Trusts (REITs). Inland Real Estate Investment Corporation. Retrieved December 18, 2014.
  16. ↑ May 22nd 2014 Letter from UNITE HERE to the SECCorrespondence between Ken Mills and Thomas McGuinness beginning May 22nd 2014
  17. ↑ Daniels, Steve. “After hit from regulators, Goodwin’s Inland Bank is growing again.” September 6, 2014. Chicagobusiness.com. Retrieved October 2, 2014.
  18. ↑ FDIC Key Demographic Information. Inland Bank & Trust. ID Report Selections: Assets and Liabilities. Report Date: June 30, 2014 and June 30, 2013. Dollars. Fdic.gov. June 30, 2014. Retrieved October 2, 2014.
  19. ↑ FDIC Key Demographic Information. Inland Bank & Trust. ID Report Selections: Net Loans and Leases. Report Date: June 30, 2014 and June 30, 2013. Dollars. Fdic.gov. June 30, 2014. Retrieved October 2, 2014.
  20. ↑ Yerak, Becky. “MB Financial’s former president joins Inland Bank.” April 11, 2011. Archive.chicagobreakingbusiness.com. Retrieved October 2, 2014.
  21. ↑ Annual Report of Holding Companies—FR Y-6 for Inland Bancorp, Inc. (PDF). Chicagofed.org. December 31, 2013. Retrieved October 2, 2014.
  22. ↑ Annual Report of Holding Companies—FR Y-6 for Inland Bancorp, Inc. (PDF). Chicagofed.org. December 31, 2013. Retrieved October 2, 2014.
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