Orion shutdown costs M&I millions

When state and federal regulators shut down Naples-based Orion Bank on Nov. 13, it likely wiped out a $17 million loan M&I Bank says it made to parent company Orion Bancorp.

At the time it was shut down, Orion was the second largest bank on the Gulf Coast with $2.7 billion in assets. Orion Bancorp was a one-bank holding company.

According to a report in the Milwaukee Journal Sentinel, M&I Bank extended Orion Bancorp a $50 million line of credit in March 2008 in exchange for Orion stock as collateral. The Milwaukee-based bank later reduced the line of credit, but Orion eventually used about $17 million, according to a lawsuit M&I filed recently against Orion.