Source: Reuters

Broadway Bank was among seven Illinois banks whose failure was announced on Friday. U.S. regulators have seized 15 banks in the past two weeks, as the Federal Deposit Insurance Corp ratchets up efforts to clean up the bank industry. Regulators have closed 57 banks this year.

Amcore Bank was the largest to close on Friday, with $3.8 billion in assets and $3.4 billion in total deposits as of December 31, 2009, the FDIC said. It will be purchased by Harris National Association, a part of Canada’s BMO Financial Group.

Broadway Bank, a community bank with $1.2 billion in assets, had been limping along for months under the weight of bad commercial real estate loans.

The bank is owned by the family of Alexi Giannoulias, the first-term Illinois state treasurer who is in a tight race for Obama’s previous post to be decided in the November election.

The FDIC said MB Financial is assuming the deposits of Broadway Bank.

Obama backed Giannoulias, a banking scion, for treasurer, and the two have played basketball together, with Giannoulias having played professionally. He highlighted his banking experience in running for the post.

Republicans have condemned Giannoulias’ role in the bank’s soured real estate portfolio, including loans to such figures as convicted prostitution ring operator Michael “Jaws” Giorango. Loans were also made to convicted influence peddler Antoin “Tony” Rezko, who also was a fund-raiser for Obama.

Giannoulias has said his father was not alive to say how Giorango and Rezko became the bank’s customers. The elder Giannoulias died in 2006.

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