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The Mortgage Graveyard
Failed, closed and a c q u i r e d mortgage-related entities.
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| Friday's Failures to Cost Over $1 billion
Vineyard Bank, Temecula Valley Bank seized by bank regulators
July 20, 2009
By MortgageDaily.com staff
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Government losses on the failure of four financial institutions Friday are projected at more than $1 billion. The two biggest failures had a heavy concentration of commercial and construction-and-land-development loans.
The Office of the Comptroller of the Currency closed down Vineyard Bank, National Association, and handed control over to the Federal Deposit Insurance Corporation, a news release late Friday said.
"The bank had experienced substantial dissipation of assets and earnings due to unsafe and unsound practices," the OCC said. "The bank incurred losses that depleted its capital, and there is no reasonable prospect that the bank will become adequately capitalized without federal assistance."
The OCC had issued a cease-and-desist order against Vineyard last year.
Vineyard, established in 1981, employed 254 people as of March 31. In late 2006, Rancho Bank was merged into Vineyard.
Vineyard had $1.9 billion in assets as of March 31, including $49 million in one- to four-family mortgages, $620 million in commercial mortgages and $631 million in construction-and-land-development loans.
California Bank & Trust assumed all of the $1.6 billion in deposits as of March 31 at the Rancho Cucamonga, Calif.-based bank -- though $134 million in brokered deposits were retunred. In addition, California Bank & Trust acquired around $1.8 billion of Vineyard's assets with the FDIC sharing in losses on $1.5 billion of the assets.
The FDIC expects its Deposit Insurance Fund to take around a $579 million hit from Vineyard's collapse -- the 56th this year.
Over in Temecula, Calif., the state's Department of Financial Institutions announced late Friday the closure of Temecula Valley Bank. Inadequate capital was cited.
"The Department of Financial Institution has been closely monitoring the bank because of its inadequate capital level," the state said. "The Department of Financial Institutions had ordered it to increase its capital reserves to a safe and sound level, but efforts by the bank to do so were unsuccessful."
Temecula faced a $24,000 FDIC civil money penalty on March 9, while the FDIC issued a cease-and-desist order on Feb. 12.
The 12-year-old institution had 228 employees as of March 31. Assets were $1.5 billion as of May 31. Residential mortgage holdings were $42 million, while commercial mortgages were $684 million and construction-and-land-development assets were $42 million as of March 31.
First-Citizens Bank and Trust Co. of Raleigh, N.C., agreed to assume all of Temecula's $1.3 billion in deposits. Around $0.3 billion in brokered deposits will be returned. First-Citizens also agreed to acquire all of the failed institution's assets with the FDIC sharing in losses on $1.3 billion of the assets.
The FDIC projected it will lose $391 million on the failure of Temecula -- which was the 57th federally insured institution to fail during 2009.
In addition to Vineyard and Temecula -- First Piedmont Bank, which had $115 million in assets, and BankFirst, which had $275 million in assets, also failed Friday. Including all four of Friday's failures, FDIC losses are projected at $1.1 billion.
Including Friday's casualties, MortgageDaily.com has reported on the closing of 103 mortgage-related companies or operations in 2009.
Landmarc Capital and Investment Co. -- which was seized last month by the Arizona Superintendent of Financial Institutions -- agreed to a Maricopa County Superior Court judge's order appointing Superintendent Felecia Rotellini as permanent receiver of the company, a press release last week said. A hearing allowing Landmarc to make a case for not being forced into receivership was canceled.
Rotellini has full authority to conserve, rehabilitate or liquidate Landmarc's assets as necessary.
"Landmarc's principals consented to the court's order that specifically requires them to cooperate with the receiver by identifying investors, the amounts they invested, and any property securing their investments; identifying and listing the ownership interests of investors in Landmarc's pooled accounts; and identifying properties repossessed by Landmarc," the statement said. |
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Corporate Mortgage News
M e r g e r s, a c q u i s i t i o n s and private and public offerings. Other corporate activity including executive appointments, bankruptcies name changes.
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