Covenant Bank shut down by FDIC

Bank failure wipes out investments of 3,000 shareholders from Living Word Christian Center


Share on Facebook
Share on Twitter

By Jean Lotus


Regulators from the Federal government shut down Covenant Bank Friday night after two and a half years of probation from the FDIC. The Lawndale-based bank's assets were sold to Liberty Bank and Trust Co. of New Orleans.

Depositors of the bank will continue to have access to their funds, which are insured by the FDIC. But the bank's closing wiped out the investment of more than 3,000 congregation members who were shareholders in the bank.

According to filings with the FDIC, in 2012 through Sept. 30 the bank lost $2.2 million. Financial reports showed that in September the bank had only $573,000 in funds to support losses. As of Dec. 31, the bank had approximately $58.4 million in total assets and $54.2 million in total deposits. The FDIC said the banks' closing will cost its insurance fund $21.8 million.

"Over the last few years, we made every attempt to raise the additional money needed to meet the regulatory requirements for the bank," Winston said on his website.

Forest Park's Living Word Christian Center Pastor Bill Winston founded Covenant Bank in 2008. Shareholders purchased the former Community Bank of Lawndale for $3 million.

The bank issued real estate loans, many of them to rehabilitate Lawndale multi-unit buildings, which went sour in the bad economy. In 2011 Covenant was warned by the FDIC that it needed to raise $3 million to be adequately capitalized. The bank received another FDIC warning in December of 2012.

"Unfortunately, the troubled economic times made it difficult for people to invest. My vision for the bank was to provide an economic engine to help revitalize urban communities, such as Lawndale, by providing lending for small businesses, commercial development, and affordable housing, as well as education and financial literacy to local residents."

Winston's website said he would be communicating directly with shareholders.

In November, Illinois State Rep. LaShawn K. Ford asked the Illinois Secretary of Financial and Professional Regulation to grant an extension to the bank to give them more time to raise capitalization funds.

In November, Covenant's President Belinda Whitfield, who is also the treasurer of Living Word Christian Center, complained that the FDIC had given "a very short timeframe" to the bank to raise adequate capitalization. Whitfield was not available for comment on Saturday morning.

Covenant Bank is the third FDIC-insured institution to fail in the nation in 2013, the FDIC reported. It is the first bank failure in Illinois in 2013. The last FDIC-insured institution closed in Illinois was Citizens First National Bank in Princeton in November 2012.

Email: Twitter: @FP_Review

Reader Comments

32 Comments - Add Your Comment

Note: This page requires you to login with Facebook to comment.

Comment Policy

angie bold from ft.worth,tx 76110  

Posted: June 7th, 2013 9:21 AM

Just wanted Pastor Winston to know I am praying for u down here in ft. Worth. This just means you multiplied that by 100fold. I love watching your preaching/teaching.watching 2005 dvd's from great lakes. Dont know how my husband aquired these. I believe it is supernatural after lidtening to your message. Halleluya. Attending swbc for the first time this year. Hope to see you there with a testimony of 100 fold. And as Jerry Savell would say..."by the hand of the Lord He was restore 7 fold."Bless

Katie Hull Redmond from Chicago, Illinois  

Posted: March 7th, 2013 9:05 AM

One more thing - Are you saying your concerns about the bars would go away if people were messing up the street at 1AM instead of 2AM? And that we would use considerably less police resources in that one hour?

Katie Hull Redmond from Chicago, Illinois  

Posted: March 7th, 2013 9:02 AM

Bob, I live in Forest Park. I list "Chicago" as my home city on Facebook as my general location. So yes, I do have a horse in this race. Having lived in the near west suburbs my entire life, I was well-aware of of the bar/party atmosphere in Forest Park before I BOUGHT here. (See, I'm invested). Living in Forest Park and complaining about the bars is like living in New Orleans and complaining about the Mardi Gras crowd. I'm much more concerned about how our tax dollars are being used toward education. P.S. - your snarky tone does you no favors.

Bob on Thomas  

Posted: March 6th, 2013 7:26 PM

P.S. Matt on Madison. As far as the State of Illinois goes, typical selfish, wiseguy answer. The whole concept is flawed. All the parties involved are whoring themselves to make money off of a less than moral endeavor that will only cheapen the image of our community. You mention River Forest and Riverside, interesting, they're not allowing video gambling.

Bob on Thomas  

Posted: March 6th, 2013 7:10 PM

KHR from Chicago, you don't have a horse in this race. However, If you bothered to read the thread, I suggested closing the bars 1 hour early. Matt, you have a reading issue too. I stated that the taxpayers, me included, subsidize the bars by paying for heightened police protection during and after bar hours. Well I guess you are right in some respect as the mayor is a taxpayer too.

Matt on Madison  

Posted: March 6th, 2013 3:02 PM

So Bob your issue should be with the state who decides what business can have slot machines. You may want to consider moving to River Forest or Riverside where late night bars don't exist. you still haven't answered how the mayor subsidizes bars??

Katie Hull Redmond from Chicago, Illinois  

Posted: March 6th, 2013 3:02 PM

Bob, what do you propose? Close down all the bars?

Bob on Thomas  

Posted: March 6th, 2013 2:55 PM

Yes Donna D, we all pay property taxes. Tax dollars wasted on policing the town of the drunks that the bar owners create. The next possible bar subsidy is video gambling if it passes next month. Why should the bar owners get the unfair business advantage of making money from gambling (about $900 a month per machine) while Accents by Fred, Macdaddy, Yearbook and Sylvan Learning center cannot. Plus the fallout will create even more headaches for the police on our dime?

Donna D. from Forest Park  

Posted: March 6th, 2013 12:44 PM

@Bob on Thomas and @Townhall, you two are both asinine. Calderone cannot "take" any money from the village without it being public knowledge and knowing him as I do, it wouldn't occur to him to even, Townhall, can you make such an arbitrary and salacious comment without an explanation or proof? You are despicable. And Bob, the bars pay lots of tax dollars, both in property taxes and in receipts. I think you two should move. It does none of us any good having such morons in our midst.

Matt on Madison  

Posted: March 6th, 2013 12:42 PM

Thanks Bob for Clarifying I now know that your are nuts. You did not indicate how the bars were being subsidized and if you think for a second that Kays, Team Blonde come close to bringing in the tax revenue that a Doc Ryans, Healys, or Salante. Unless your going to make the town dry, I don't get your point.

Bob on Thomas  

Posted: March 6th, 2013 10:19 AM

Well Matt on M. Simple economics. Schauer's, Louie's Grill & Starbucks all bring in sales tax dollars (possibly more than most of the bars) and none require intensive police surveillance or interaction during or after their business hours. I have never heard of drunken fights at Team Blonde or Kay's. The bars, on the other hand, require police at high alert. This subsidy costs all taxpayers. Close the bars earlier, less excessive drinking & drunken behavior = less hassle & expense for the FPPD

Matt on Madison  

Posted: March 5th, 2013 8:42 AM

Bob please explain how closing the bars an hour earlier will save money and how the bars are being subsidized????

Bob on Thomas from Forest Park  

Posted: March 4th, 2013 2:20 PM

Matt on Madison, your comments are asinine too. Most of the Mad St. renaissance was in place before Calderone became mayor. Besides it's ancient history now like the 85 Bears. You want to improve Mad St and save money? Close the bars 1 hour earlier. Quit subsidizing the tavern owners. They've made a mess of the street and now they want gambling!

matt on Madison  

Posted: March 4th, 2013 12:41 PM

Townhall, those are really asinine comments. How is Tony taking money for himself. The village is much better off then when he took office do you remember what Madison street looked like. How would you improve the village???

townhall from forest park  

Posted: March 3rd, 2013 8:01 AM

Wow, I guess bill Winston and Tony have much in common. Tony take $3 for him and leaves $1 for the village and bill does the same $5 for bill and $1 for God. It is really sad that both are so self centered and about only what is in it for themselves. It would be great if Tony actually wanted to make forest park better for it's citizens and if bill actually wanted to help the poor instead of lining his bank accounts.

Berwyner from Berwyn  

Posted: February 28th, 2013 4:15 PM

Any one who has been to the Living Word KNOWS Dollar Bill Winston did not lose a DIME on this bank ... his congegration did. Any one that has ever been to his Sunday service knows its 6 hours between 3 services of flat out hands out soliciting for money money and more money ... the man gladly takes dollar bills from little kids that approach the pulpit ... he is not a prophet ... he is a "businessman" that pimps god for his own personal gain.


Posted: February 26th, 2013 4:40 PM

to "A woman of God' doubt you are a believer. Winston could not have pulled of this fraud without those who wanted to drink the kool-aid. He reminds me of the character Steve Martin played in "Leap of Faith" back in the 80ties. The system works and the regulators along with the authorities are catching those who abused their position and lost the money of honest investors.

Bill from Melrose Park South  

Posted: February 23rd, 2013 3:57 PM

Woman of God, I don't pretend to have the best relationship with Jesus, but I'm pretty sure about one thing- He didn't go around founding banks (in fact, he chased the money lenders from the temple) and he didn't hit up his flock for money. And a question- are you calling Bill Winston a PROPHET?..... because I only see a business man. If he is truly IS a prophet, I'd think he'd renounce worldly goods, as Jesus did, and make the people in his flock who have suffered financially whole.

A woman of God  

Posted: February 23rd, 2013 1:12 PM

Before anyone goes bad mouthing Pastor Winston, they need to get their facts straight. He did everything he possibly could to prevent this from happening. He is a man of integrity and faith. If you know anything about FDIC regulations, you could understand a little better. Before you pass judgement CHECK YOUR SOURCES, DO YOUR OWN RESEARCH, AND DON"T RELY ON THE MEDIA because they don't tell the whole story or the truth. God said, touch not His annointing and do His prophet no harm. DON'T JUDGE!

Rudy from Chicago  

Posted: February 23rd, 2013 3:37 AM

According to Bill Winston, we are designed to speak to mountains. Why didn't Bill seek money from the mountains?

Joe Smo from Forest Park  

Posted: February 21st, 2013 7:44 PM

To the share Holders no matter what Winston tells you DO NOT DRINK THE KOOL AID!!!


Posted: February 21st, 2013 2:02 PM

Truly a situation of Prosperity Christianity by Bill Winston. It seems however the only one to benefit was Bill using the congregation as shareholders in the bank which had it been operated within regulatory guidelines it may still be here today. Perhaps Sundays message will be "Fleecing The Flock".

So sad from Forest Park  

Posted: February 19th, 2013 5:22 PM

Rev. Wintson is richer than God. If he loved his church he would sell his jet and pay back all thos old ladies. Shame on him.

Bill from Melrose Park South  

Posted: February 19th, 2013 9:47 AM

I googled and got several to compare. Site below, which I didn't access, says it has data from Dec., 2012.....

well done BfMPS  

Posted: February 19th, 2013 9:19 AM

Nice job Bill from MPS. Can you cite you source for that? I'm guessing I could google for their financial statements. But if you've got a short link handy .... And @truth seeker -- I refi'ed through them post fin. crisis, and (probably like everyone else) it was markedly more thorough than anything I'd gone through before. I'm all for healthy skepticism, but unless you've got some basis for it, that comment was not cool.

Bill from Melrose Park South   

Posted: February 19th, 2013 8:42 AM

Forest Park National Bank.... Total Assets:...$197,877,000... Total Deposits:... $179,446,000...Total Equity Capital:...$17,303,000... Net Income:...$1,131,000... Return on Assets:... 1%... Return on Equity:...9% Maybe Bill Winston should have had the humility to get Jerry Vainisi's counsel.

Bill from Melrose Park South  

Posted: February 19th, 2013 8:26 AM

Why do you "guess" Forest Park National Bank will be the next go under, truth seeker? Has FPNB been ordered by the FDIC to shore up their cash reserves? Has the FPNB made tens of millions in bad loans? Are its funds on hand as absurdly low as Covenant's were? .....What do you base your comment on, a comment about an important village and area financial institution? Have you any facts to share with us?

truth seeker from forest park  

Posted: February 19th, 2013 5:10 AM

I guess it is only a matter of Time now until the same happens to forest park national bank.


Posted: February 18th, 2013 2:48 PM

Thank you for this article which provides some significant details not available in the Chicago Business (Crain's) article published last week.

Bill from Melrose Park South  

Posted: February 17th, 2013 11:17 AM

If I follow Winston's "prosperity christianity" logic to its logical conclusion, I guess God doesn't think Winston's congregation has been good enough. I always thought prosperity Christianity odd, since Christ is said in the Bible to have angrily thrown the money lenders out of the temple. Maybe he just did so again?

FDIC link & follow-up questions  

Posted: February 16th, 2013 9:37 PM

Link to FDIC press release: more info on closing: A sad but important story. A couple questions: Source of the statement that 3000 congregation members were shareholders? How many congregation members were there? Did they know they were shareholders in the bank? Are they all local? Could be wrong but thought I read somewhere that Living Word had operations in other regions.

Sam Medina from Toronto  

Posted: February 16th, 2013 8:38 PM

Hmm.. looks like a loot and run scam.

Facebook Connect

Quick Links

Sign-up to get the latest news updates for Forest Park.

MultimediaContact us
Submit Letter To The Editor
Place a Classified Ad