Two California banks go bust in one day
Big News Network.com Saturday 6th November, 2010
The California regulator appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC announced it had entered into a purchase and assumption agreement with Grandpoint Bank, of Los Angeles, California, to assume all of the deposits of First Vietnamese American Bank.
The sole branch of First Vietnamese American Bank, which was established in 2005 to service the Vietnamese community, will reopen on Saturday as a branch of Grandpoint Bank. Depositors of First Vietnamese American Bank will automatically become depositors of Grandpoint Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage up to applicable limits, the FDIC said. Customers of First Vietnamese American Bank should continue to use their existing branch until they receive notice from Grandpoint Bank that it has completed systems changes to allow other Grandpoint Bank branches to process their accounts as well.
On Friday night and over the weekend, depositors of First Vietnamese American Bank can access their money by writing checks or using ATM or debit cards, the FDIC statement said. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.
As of September 30, 2010, First Vietnamese American Bank had approximately $48.0 million in total assets and $47.0 million in total deposits. Grandpoint Bank did not pay the FDIC a premium for the deposits of First Vietnamese American Bank. In addition to assuming all of the deposits of the failed bank, Grandpoint Bank agreed to purchase essentially all of the assets.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $9.6 million. Compared to other alternatives, Grandpoint Bank’s acquisition was the least costly resolution for the FDIC’s DIF. First Vietnamese American Bank is the 143rd FDIC-insured institution to fail in the nation this year, and the twelfth in California.