First Federal, Santa Monica seized by regulators

This is bank failure #140 and it has $6.1 billion in assets.

First Federal Bank of California, a Federal Savings Bank, Santa Monica, California, was closed today by the Office of Thrift Supervision, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with OneWest Bank, FSB, Pasadena, California, to assume all of the deposits of First Federal Bank of California.

The 39 branches of First Federal Bank of California will reopen on Saturday as branches of OneWest Bank, FSB. Depositors of First Federal Bank of California will automatically become depositors of OneWest Bank, FSB. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branch until OneWest Bank, FSB can fully integrate the deposit records of First Federal Bank of California.

This evening and over the weekend, depositors of First Federal Bank of California can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.

As of September 30, 2009, First Federal Bank of California had approximately $6.1 billion in total assets and $4.5 billion in total deposits. OneWest Bank, FSB did not pay the FDIC a premium for the deposits of First Federal Bank of California. In addition to assuming all of the deposits of the failed bank, OneWest Bank, FSB agreed to purchase essentially all of the assets.

The FDIC and OneWest Bank, FSB entered into a loss-share transaction on $5.3 billion of First Federal Bank of California’s assets. OneWest Bank, FSB will share in the losses on the asset pools covered under the loss-share agreement.