UPDATE 1-MB Financial to take over Corus branches-report

NEW YORK, Sept 11 (Reuters) - MB Financial Inc (MBFI.O)will take over Corus Bankshares Inc Branches, Crain's Chicago reported on Friday, citing a source familiar with the matter.

The Federal Deposit Insurance Corp (FDIC) is auctioning off the deposits and assets of Corus, a troubled Chicago-based lender specializing in condominium, office, hotel and apartment projects, sources familiar with the matter told Reuters.

Corus CORS.O had assets of about $7.1 billion as of June 30.

In July, the firm said it was "critically undercapitalized," a condition that could result in its failure. Corus posted a second-quarter loss of $487.3 million.

Corus's failure would make it among the largest U.S. lenders to fail this year.

MB Financial Inc, based in Chicago, has more than $8 billion in assets, according to its website. Its Chicago area bank has more than 70 locations.

(Reporting by Steve Eder; Editing Bernard Orr)