A troubled Naperville bank in which local investor Art Sundry was a shareholder and former board member was closed by the FDIC on April 23. Its assets were transferred to Wheaton Bank.
Wheatland Bank was only three years old but had been weakened by risky real estate loans made just as the housing bust took hold. Sundry was a board member and shareholder of Wheatland Bank from 2007 until he was removed in July 2009.
Sundry owns several storefronts on Madison Street in Forest Park through his development company, Big Fin Properties. He also owns the Caffe de Luca in Forest Park and Chicago.
Wheatland Bank grew rapidly at the beginning-of-the-end of the housing bubble – doubling its assets to $484 million between 2007 and 2008. But then construction loans began to default.
In December 2009, Wheatland Bank sued Sundry, along with two other former board members – former CEO Michael Sykes and shareholder Edward Elsbury – for not disclosing an alleged conflict of interest with a finance company they also owned, Mezzanine Finance, LLC. The suit alleges that Sundry and the others arranged and approved bad construction loans from which they personally profited.
According to Crain’s Chicago Business, Sundry and his other undisclosed partners in Mezzanine Finance, LLC used Wheatland Bank as a refinancing vehicle for risky high-interest construction loans made by Mezzanine. In one case, cited by Crain’s, Wheatland refinanced a commercial property for $5.4 million that was in default to Mezzanine Finance. Mezzanine allegedly earned $170,000 on the transaction in interest and late fees, according to Wheatland’s suit. Big Fin Properties was not named in the suit.
In January, the FDIC put Wheatland on regulatory probation noting that 33 percent of Wheatfield’s construction loans were in delinquency. The bank was ordered to beef up its reserves and hire new management.
According to an FDIC press release on April 23, Wheaton Bank and Trust took over Wheatland Bank and customers had uninterrupted access to their accounts and loans. The bank had approximately $437.2 million in total assets and $438.5 million in total deposits. The FDIC agreed to absorb a portion of $300.2 million in a loss-share agreement with Wheaton Bank & Trust.
Sundry did not return calls from the Review.