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Failed U.S. bank reopens under new name

Updated:2009-12-21 13:52:49

The 39 branches of the failed First Federal Bank of California (FFBC) reopened on Saturday as branches of OneWest Bank.

FFBC, which was founded in 1929, was closed on Friday by the Office of Thrift Supervision because of defaults on adjustable mortgages.

Officials of OneWest Bank, formed earlier this year from the remnants of the failed IndyMac Bank, said they do not anticipate closing any bank branches.

Depositors can access their money over the weekend by writing checks or using automated teller machine or debit cards, Greg Hernandez of the Federal Deposit Insurance Corp. (FDIC) said.

Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual, Hernandez said.

Depositors will automatically become depositors of OneWest Bank and continue to be insured by the FDIC, Hernandez said.

Customers should continue to use their existing branch until OneWest Bank can fully integrate the deposit records of FFBC, Hernandez added.

According to the FDIC, FFBC had approximately 6.1 billion dollars in total assets and total deposits of 4.5 billion as of Sept. 30.

OneWest Bank did not pay a premium to assume all the deposits of FFBC. In addition to assuming all of FFBC's deposits, OneWest Bank agreed to purchase essentially all of its assets, Hernandez said.

The FDIC and OneWest Bank had entered in a loss-share transaction on 5.3 billion dollars of FFBC's assets. Hernandez estimated that FFBC's failure will cost the FDIC's Deposit Insurance Fund 146.3 million dollars.

OneWest Bank's acquisition of all of FFBC's deposits was the "least costly" resolution for the fund compared to the alternatives, Hernandez said.

FFBC was the 140th FDIC-insured institution to fail in the nation this year, and the 17th in California, Hernandez said.

The purchase gives the Pasadena-based OneWest Bank 72 branches in the Greater Los Angeles area, with more than 11 billion dollars in deposits.



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