California Loans News

Nine subsidiaries of FBOP Corporation of Oak Park, Illinois were closed down by the Federal Deposit Insurance Corporation (FDIC). Three of these are located in California, another three in Texas, two in Illinois and one in Arizona. These closed down institutions contributes to those that have failed this year, totaling to 115. This is the highest number of failures for this kind of financing agencies in a single year since the saving & loan crisis.

More specifically, the nine banks are Bank USA N.A. Phoenix, California National Bank of Los Angeles, San Diego National Bank of San Diego, Pacific Bank of San Francisco, Park National Bank of Chicago, Community Bank of Lemont in Lemont, Illinois, North Houston Bank in Houston, Madisonville State Bank in Madisonville, Texas and Citizens National Bank of Teague, Texas. All together, these banks have 153 offices. These also account for the combined assets of $19.4 billion and deposits of $15.4 billion. Beginning last Saturday, these would be opened as U.S. Bank branches.

The FDIC paved the way for an agreement with the U.S. Bank of Minneapolis, Minnesota to take over the operations of the said institutions. The U.S. Bank of Minneapolis is a wholly-owned subsidiary of the U.S. Bancorp. It has also been touted as one of the country’s top 10 banks.

The U.S. Bank said that the agreement was a “low-risk” acquisition. The FDIC has also agreed to share in any losses on all the loans previously made in the deal. Furthermore, the new owner said that it would still implement either of the FDIC’s or other approved mortgage loan modification programs on the residential mortgages assumed within the loss-share agreement.

The FDIC also estimated that the closing of these FBOP subsidiary banks have cost the agency a collective amount of $2.5 billion. As for the consumers of the said failed banks, they are still protected. The FDIC would cover customer accounts even those reaching up to $250,000. They could access their money by writing checks or using ATMs or debit cards. The checks would be processed, and the borrowers could still make their mortgage and loan payments like business as usual.

Vice chairman of consumer banking for U.S. Bancorp Rick Hartnack said, “This transaction is consistent with the growth strategy that we have outlined many times in the past, which includes enhancing our existing franchise through low-risk, in-market acquisitions.”

The U.S. Bank has taken advantage of such opportunities for growth expansion. Last month, it has purchased BB&T’s Nevada banking operations as an addition to its present acquisitions in the said states. This recent takeover of FBOP’s subsidiaries gives the institution a larger market share in the states of California, Illinois and Arizona and a rather new footprint in Texas. As for the U.S. Bancorp, it has repaid the Treasury Department all of its $6.6 billion in Trouble Asset Relief Program (TARP) bailout money. It has also reported a net income of $603 million for the third quarter, according to the company’s report last month.

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