All Insured and Uninsured Deposits Transferred to Acquiring Bank
FOR IMMEDIATE RELEASE
July 25, 2008 |
Media Contact:
In Washington: Andrew Gray
(202) 898-7192
angray@fdic.gov
In Arizona: David Barr
Cell: (703) 622-4790
dbarr@fdic.gov
|
First National Bank of Nevada, Reno, Nevada, and First Heritage Bank, N.A., Newport Beach, California (owned by First National Bank Holding Company, Scottsdale, Arizona), were closed today by the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation (FDIC) was named receiver. The FDIC entered into purchase and assumption agreements with Mutual of Omaha Bank, Omaha, Nebraska, to take over all of the deposits and certain assets of the First National Bank of Nevada, Reno (also operating as First National Bank of Arizona, which recently merged into it), and First Heritage Bank, N.A., Newport Beach, California.
The 28 offices of the two banks will reopen on Monday as branches of Mutual of Omaha Bank. All depositors, including those with deposits in excess of the FDIC's insurance limits, will automatically become depositors of Mutual of Omaha Bank for the full amount of their deposits. Depositors will continue to be insured with Mutual of Omaha Bank so there is no need for customers to change their banking relationship to retain their deposit insurance.
Over the weekend, customers of the banks can access their money by writing checks or using ATM or debit cards. Checks drawn on the banks will be processed normally. Loan customers should continue to make loan payments as usual.
Of the 10 institutions that have failed over the past two years, this is the second time in which another bank acquired all of the failing banks' insured and uninsured deposits. Mutual of Omaha Bank's acquisition of all deposits was the "least costly" resolution for the Deposit Insurance Fund compared to all alternatives because the expected losses to uninsured depositors were fully covered by the premium paid for the banks' franchises.
As of June 30, 2008, First National of Nevada had total assets of $3.4 billion and total deposits of $3.0 billion. First Heritage Bank had total assets of $254 million and total deposits of $233 million.
Customers who would like more information on today's transactions should visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/fnbnv.html (for First National Bank of Nevada) and http://www.fdic.gov/bank/individual/failed/heritage.html (for First Heritage Bank, N.A.). They may also call the FDIC toll free about both institutions at 1-866-674-8944 and 1-800-523-8089 until 9:00 p.m. Pacific time this evening, and then 8:00 a.m. to 8:00 p.m. daily, thereafter.
In addition to assuming all of the deposits of the banks, Mutual of Omaha Bank will purchase approximately $200 million of assets from the receiverships. Mutual of Omaha Bank will pay the FDIC a premium of 4.41 percent to assume all the deposits. The FDIC will retain the remaining assets for later disposition.
First Heritage Bank, N.A., Newport Beach, California, had three branches; its clientele was comprised primarily of corporations. First National Bank of Nevada, with 25 branches, also operated as First National Bank of Arizona. It is not affiliated with National Bank of Arizona, Zions Bancorporation or its affiliates.
The cost of the transactions to the Deposit Insurance Fund is estimated to be $862 million. The failed banks had combined assets of $3.6 billion, .03 percent of the $13.4 trillion in assets held by the 8,494 institutions insured by the FDIC.
First National Bank of Nevada is the first bank to be closed in Nevada since Frontier Savings Association, Las Vegas, on December 14, 1990. The bank closed most recently in California was IndyMac Bank, F.S.B., Pasadena, on July 11, 2008. This year, a total of seven FDIC-insured banks have been closed.
On July 16, 2008,
DCI,
De Novo Strategy and
CREED hosted a BarCampBank in Chicago at the Drake Hotel - it was a great success! All who attended enjoyed a lively discussion on the current affairs of several banking topics, such as de novo banking, enterprise zone marketing, Islamic finance, bank loyalty, and market trends. Read on for an overview of the information shared at the meeting.
De novo banking is always a topic of interest. Industry folks want to know how many new banks are being started and what the consensus is on whether it's wise, in the current environment, to start a new bank. In the first quarter of this year, 38 new banks received permission to open. Annualizing that number indicates a run-rate of 152 for 2008. However, as the financial crisis has deepened, I suspect that the latter half of the year will slow down, such that 2008 will possibly close out with about 100 new bank openings nationwide.
Attendees also discussed the wisdom of starting a new bank in these difficult times. As the question was turned over and thoughtfully discussed, the general opinion was that while capital would be difficult to obtain, starting a bank now would be a good thing. After all, the bottom of a market is normally the right time to enter. And, since it takes 14-24 months to actually open the doors, the economic environment is likely to be much different by the time a bank started today is ready to begin doing business. These factors may be contributing to the encouraging market trends for DCI thus far this year; trends have been up and DCI has seen an increase in its activity.
Islamic Finance was perhaps the most interesting topic discussed. While there are approximately 7 million people in the United States of Muslim heritage, there are very few sources of Sharia compliant banking. A few banks have started offering Sharia compliant residential mortgage loans, but this is a small subset of a larger market. Most Muslims are small business owners and need other sources of small business loans and commercial real estate loans. If a bank is interested in labeling its loans and deposits as Sharia compliant, it must employ an Islamic Scholar to research all the terms of the transactions and compare them with Islamic law to make sure they are valid. Once this is done, the bank can offer its banking products to the Muslim public as "Sharia Compliant." The average Muslim in the U.S. is educated with a bachelor's degree and earns an average income of $67,500. This places this demographic in the highest income bracket of the immigrant population, along with other Southeast Asians. Within this group, the default rate is relatively low, so the opportunity for a bank to place good, profitable financial transactions on the books is strong.
Another topic discussed was how to increase bank loyalty. There were several ideas put forth and one was to offer better financial education, specifically with the goal of matching bank products to customer needs. This ultimately means providing customers with easy-to-understand information about how specific products will help their businesses and what options are available to enhance those products to the customer's advantage. The philosophy of ‘helping someone else get what he truly needs and he will help you' comes to mind here. Banks might consider adding more customized products to the portfolio of customer solutions. Then, give customers the information and ability to pick and choose product features that will contribute to their own success. Ultimately, this is where the community bank will flourish - by building success through its customers. This is easy to talk about and more difficult to implement, but the banks and core providers will have to figure it out.
This leads to the Enterprise Zone marketing ideas. Forty-three states have enterprise zones, each with different tax credits for businesses that operate within these zones. Approximately 95 percent of the tax credits every year go unclaimed, mostly because businesses are unaware that the benefits are available or unaware of how to do the accounting so the credits can be claimed. Often it is a matter of education, on the part of the business owner and its accountant. The bottom line is that there are billions of dollars available and bankers - if they learn how to help their customers - can capitalize on this great opportunity.
There are many workshops, seminars, and conferences that people attend, but the discussions at a BarCampBank are amazingly insightful for all who attend. We want to thank our attendees and wish them the best of success in their endeavors. A sincere thanks also to our sponsors as we greatly appreciate their support; we at De Novo Strategy will certainly plan to sponsor more of these events in the future.
By Wendell Brock, MBA, ChFC
FDIC Establishes IndyMac Federal Bank, FSB as Successor to IndyMac Bank, F.S.B., Pasadena, California
FOR IMMEDIATE RELEASE
July 11, 2008 |
Media Contact:
In Washington: Andrew Gray (202) 898-7192,
Cell: 202-494-1049
angray@fdic.gov
In California: David Barr
Cell: 703-622-4790
dbarr@fdic.gov
|
IndyMac Bank, F.S.B., Pasadena, CA, was closed today by the Office of Thrift Supervision. The Federal Deposit Insurance Corporation (FDIC) was named conservator. The FDIC will transfer insured deposits and substantially all the assets of IndyMac Bank, F.S.B., Pasadena, CA, to IndyMac Federal Bank, FSB. Brokered deposits will be held by the FDIC and those insured deposits will be paid off when the insurance determination is complete. IndyMac Bank, FSB had total assets of $32.01 billion and total deposits of $19.06 billion as of March 31, 2008. As conservator, the FDIC will operate IndyMac Federal Bank, FSB to maximize the value of the institution for a future sale and to maintain banking services in the communities formerly served by IndyMac Bank, F.S.B.
Insured depositors and borrowers will automatically become customers of IndyMac Federal, FSB and will continue to have uninterrupted customer service and access to their funds by ATM, debit cards and writing checks in the same manner as before. Depositors of IndyMac Federal Bank, FSB will have no access to on-line and phone banking services this weekend. These services will be operational again on Monday. Loan customers should continue making loan payments as usual.
Beginning on Monday, July 14, IndyMac Federal Bank, FSB's 33 branches will observe normal operating hours and will continue to offer full banking services, including on-line banking. For additional information, the FDIC has established a toll-free number for customers of IndyMac Federal Bank, FSB. The toll-free number is 1-866-806-5919 and will operate today from 3:00 p.m. to 9:00 p.m. (PDT), and then daily from 8:00 a.m. to 8:00 p.m. thereafter, except Sunday, July 13, when the hours will be 8:00 a.m. to 6:00 p.m. Customers also may visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/IndyMac.html for further information.
At the time of closing, IndyMac Bank, F.S.B. had about $1 billion of potentially uninsured deposits held by approximately 10,000 depositors. The FDIC will begin contacting customers with uninsured deposits to arrange an appointment with an FDIC claims agent by Monday. Customers can contact the FDIC for an appointment using the toll-free number above. The FDIC will pay uninsured depositors an advance dividend equal to 50 percent of the uninsured amount.
Based on preliminary analysis, the estimated cost of the resolution to the Deposit Insurance Fund is between $4 and $8 billion. IndyMac Bank, F.S.B. is the fifth FDIC-insured failure of the year. The last FDIC-insured failure in California was the Southern Pacific Bank, Torrance, on February 7, 2003.