It all started for ShoreBank 37 years ago. In 1973, Ron Grzywinski, Mary Houghton, James Fletcher and Milton Davis purchased a failing bank in a declining and disinvested neighborhood on Chicago’s South Side.

They set out to demonstrate that banks can be powerful tools for creating positive social and community change.

The founders recognized it was impossible for a for-profit, FDIC-insured institution like ShoreBank to provide all the development activities required to grow a community stronger. So they launched several nonprofit affiliates to augment its bank’s financial services and provide additional resources otherwise unavailable to help seed and develop new enterprises.

As at Friday ShoreBank had banking offices and service centers on Chicago’s South and Far West Sides, in the North West suburbs, and in Cleveland, Ohio and Detroit, Michigan offering a wide array of financial services and products for individuals, businesses, faith-based and nonprofit organizations.

In the late 1990s, when ShoreBank began offering services and products that encouraged energy efficiency and sustainable development, it added an environmental component to its mission, making it America's first and only "triple bottom line" financial institution.

ShoreBank attracted world-wide acclaim for its success in providing affordable financial services to customers without access to a traditional financial institution. Its success spawned the community development financial institution industry in the US, that has been responsible for investing billions of dollars in urban areas all across the country and around the world.

Unfortunately it all came to grief on Friday.

Chicago's ShoreBank, was shut down Friday by the Illinois Department of Financial and Professional Regulation.

The Federal Deposit Insurance Corporation (FDIC) was named as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Urban Partnership Bank, of Chicago, a newly-chartered institution, to assume all of the deposits of ShoreBank.

The 15 branches of ShoreBank will reopen as branches of Urban Partnership Bank, including those in Detroit, Michigan, and Cleveland, Ohio, under their normal business hours, including those offices with Saturday hours. Depositors of ShoreBank will automatically become depositors of Urban Partnership Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage, an FDIC statement issued on Friday said. Customers of ShoreBank should continue to use their existing branch until they receive notice from Urban Partnership Bank that it has completed systems changes.

Over the weekend, depositors of ShoreBank can access their money by writing checks or using ATM or debit cards, the FDIC statement said. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.

As of June 30, 2010, ShoreBank had approximately $2.16 billion in total assets and $1.54 billion in total deposits. Urban Partnership Bank will pay the FDIC a premium of 0.50 percent to assume all of the deposits of ShoreBank. In addition to assuming all of the deposits of the failed bank, Urban Partnership Bank agreed to purchase essentially all of the assets except for the marketable securities and fixed assets.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $367.7 million. Compared to other alternatives, Urban Partnership Bank's acquisition was the least costly resolution for the FDIC's DIF. ShoreBank is the 114th FDIC-insured institution to fail in the nation this year, and the fifteenth in Illinois. The last FDIC-insured institution closed in the state was Palos Bank and Trust Company, Palos Heights, on August 13, 2010.