Water Tower Bank Buyout Rejected

Bank regulators Thursday shot down a proposed deal byGore-Bronson Bancorp to acquire struggling Water Tower Bank ofChicago.

The Federal Reserve Board said the rejection was based on theinadequate records of community lending at Gore-Bronson's two banksand at Water Tower. Gore-Bronson owns Irving Bank in Chicago andBronson-Gore Bank in Prospect Heights.

Although Gore-Bronson said the deficiencies were beingaddressed, the Fed said its policies require the improvements be "inplace and working well" before an application is submitted. Theagency noted the community lending record of Bronson-Gore Bankactually declined after it was acquired by Gore-Bronson.

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