Oct. 31--River Forest resident Michael Kelly built a banking empire over three decades, making himself wealthy. On Friday night, it all came tumbling down in spectacular fashion, as the government seized the nine banks run by Kelly's FBOP Corp.

U.S. Bancorp of Minneapolis, through a loss-sharing deal with the Federal Deposit Insurance Corp,. will assume all the deposits and most of the assets of the nine failed banks, which include Park National Bank of Chicago.

The timing was awkward. The government shut down $4.7 billion-asset Park National on the same day that its community development arm, Park National Bank Initiatives, received $50 million from Treasury Secretary Timothy Geithner at a ceremony in Chicago. That money is intended to stimulate investment in low-income communities on such projects as charter schools, health clinics and stores.

The 30 branches of Park National will reopen Saturday under the banner of U.S. Bancorp. The failure of the FBOP banks is expected to cost the Federal Deposit Insurance Corp. about $2.5 billion.

Oak Park-based FBOP is privately held by Kelly, who built the company by making bank deals nationwide. About $12 billion of FBOP's banking assets are in California banks. It also owns institutions in Arizona and Texas.

FBOP has total banking assets of $19.4 billion, which made it the third-biggest bank owner headquartered in Illinois after HSBC North America Holdings Inc. and Northern Trust Corp. It also represents the biggest Illinois institution whose banks have required government intervention since Continental Illinois in 1984. Park National is the 18th Illinois bank to be seized this year.

FBOP was built from scratch by Kelly, an aggressive but intensely private entrepreneur. He bought First Bank of Oak Park in 1981 and then made a career of swooping in on ailing banks in Chicago and the Sun Belt, buying them cheap and improving their results dramatically.

Until recently, Kelly was viewed as a brilliant operator. But he had an abrupt reversal of fortune last year when the government takeover of Fannie Mae and Freddie Mac exposed the holding company's large concentration of Fannie and Freddie preferred stock. The company unsuccessfully applied for about $500 million in federal TARP funds.

In Chicago, FBOP banks, which also include Community Bank of Lemont, is a lesser player. It has 33 total offices and local market share of 1.24 percent, ranking 14th.

U.S. Bank, with $265 billion in assets, has 57 offices in the Chicago area and market share of 0.85 percent, ranking 19th. Combined, they'll rank 11th in the Chicago area.

In an Oct. 21 earnings conference call, U.S.