On the day that Oak Park-based Park National Bank received $50 million in federal tax credits from the U.S. Treasury for use in its work to build low-income housing on the West Side, the Federal Deposit Insurance Corporation was seriously threatening to take over the bank’s parent company, First Bank of Oak Park Corporation.
The irony was played out at a West Side press conference this morning attended by everyone from Timothy Geithner, the U.S. Treasury secretary, to U.S. Rep. Danny Davis, U.S. Senator Roland Burris and Oak Park Village President David Pope as well as several bank executives including Park National Chairman Mike Kelly. The confab was part congratulatory and part a bottom-of-the-ninth swing to save the bank from being taken over by the feds, possibly as early as close of business today.
Daniel Watts, a vice president of the bank, said Park National has raised the new capital reportedly required by the FDIC but needs one more week in order to complete the documentation necessary to complete the deal.
“We would expect to have a deal done very quickly,” Watts said. Whether the FDIC allows the several days needed to close on those re-capitalization deals remains the open question.
Watts said Park National has received “very good reception from our local congressional delegation.”
According to Watts, the issues that Park National is facing are the result of one problem: its ownership of $885 million in now worthless preferred stock in Freddie Mac and Fannie Mae, federal housing programs that were taken over last year by the FDIC.
“We didn’t have toxic assets, we didn’t have subprime mortgages,” Watts said. “We were an investor in a government-sponsored entity that, we feel, through no fault of our own, was taken into receivership.”
Watts said the disappearance of that stock “put a big hole in our capital.”
After the press conference, Watts said about the federal tax credits, “We’re very honored to be a grantee. I think it does underscore the work we’ve done in the past. But also the work that has to be done going forward.”
Whether the bank, which supports an array of projects in such struggling communities as Austin, Maywood and Englewood, is allowed to go forward in now in the hands of the FDIC.
Following the press conference, Watts and Park National Chairman Kelly, along with Pope, huddled for 10 minutes with U.S. Rep. Bobby Rush, Davis and Burris.
Pope, who attended the press conference this morning, said the issue isn’t one of being pro-bank or anti-bank, but rather of being pro-local bank.
Echoing the comments of several others, Pope said Park National has been a major supporter of important and worthy projects in and around the village.
“I don’t know how anybody could say investing in a government-sponsored entity, Fannie Mae and Freddie Mac, can be considered to be risky,” said Watts.
“Without Park, there’s going to be a hole,’ said Watts. “It’s not just another bank that goes away. It’s the only bank in those communities that go away.”
“Our investment in that was what we considered the safest of what we do.”