Two healthy banks took over three troubled institutions during the past week, with one of the acquirers looking to build a commercial lending powerhouse. Two new chief executives were named, while massive losses have apparently forced out another senior bank executive.
Thomas J. Wurtz will leave his post as chief financial officer of Wachovia Corp., a statement Thursday said. Word of the move came just two days after the Charlotte, N.C.-based company announced a second-quarter loss of nearly $9 billion and follows the naming of a new chairman, president and chief executive officer at the struggling giant.
MainSource Financial Group Inc. announced that Archie M. Brown Jr. will become president and CEO of the Greensburg, Ind.-based company on Aug. 4. Brown replaces interim president and CEO Robert E. Hoptry, who will continue as chairman -- a post he has held since 1983.
Former Wells Fargo Home Mortgage executive Patrick Carey has been named CEO of Titanium Holdings Inc., a news release Monday said. The Salt Lake City-based company, which operates a business that contacts and consults borrowers, also indicated Todd Sibley has become chairman and Spencer Erekson was named president.
CNBS Financial Group Inc. said yesterday that it changed its name to HomeBancorp Inc.
Mutual of Omaha Bank agreed to assume about $3.2 billion in deposits and purchase about $200 million in assets from First National Bank of Nevada, Reno, and First Heritage Bank, N.A., Newport Beach, Calif., both which failed last week, the Federal Deposit Insurance Corp. announced Friday. First National had total assets of $3.4 billion and total deposits of $3.0 billion as of June 30, while First Heritage had total assets of $254 million and total deposits of $233 million. Mutual of Omaha acquired all of both banks' insured and uninsured deposits.
The two banks, which were shut down by the Office of the Comptroller of the Currency, had 28 offices and bring to 10 the number of FDIC-insured institutions that have failed over the past two years. Both were subsidiaries of First National Bank Holding Co., parent of First National Bank of Arizona in Scottsdale -- which the OCC issued a cease-and-desist order against.
OCC also announced cease-and-desist orders were issued against Northland National Bank Gladstone, Mo., and The Upstate National Bank in Lisbon, N.Y. The regulator said it issued civil money penalty orders against Northern Trust N.A. in Miami and Clyde H. Bookheimer of The Fulton County National Bank and Trust Company in McConnellsburg, Fla.
Formal agreements were reach with Republic Federal Bank N.A. in Miami, The First National Bank of Manchester in Kentucky and The American National Bank of Beaver Dam in Wisconsin, according to OCC's announcement. Community National Bank in North Branch, Minn., received a prompt corrective action directive.
Removal and prohibition orders were issued by OCC against Dara B. Brackett at The Lincoln National Bank of Hodgenville in Kentucky; Walter Jones, Bank of America N.A. in Charlotte, N.C.; and Clyde H. Bookheimer, The Fulton County National Bank and Trust Co., McConnellsburg, Penn. Meanwhile, cease-desist orders against the First National Bank of Arizona in Scottsdale and Firstmerit Bank N.A. in Akron, Ohio, were terminated.
Capital Corp. of the West and subsidiary County Bank entered into a written agreement with the Federal Reserve Bank of San Francisco, the Board of Governors of the Federal Reserve System reported. The plan calls for Merced, Calif.-based County Bank to enhance risk management and preserve capital.
Merrill Lynch announced Monday that a sale of U.S. super senior asset-backed securities collateralized-debt obligations would result in an $11.1 billion reduction of those assets from June 27. The buyer of the CDOs was Accredited Home Lenders Inc. parent Lone Star Funds, which recently acquired $9.3 billion in home lending assets and related servicing operations from CIT Group Inc. and also acquired some operating assets and the rights to certain operating assets of Bear Stearns Residential Mortgage Corp. in May.
Combined with a termination of ABS CDO hedges with XL Capital Assurance Inc. and settlement negotiations with other monoline counter-parties, Merrill expects to take around $5.7 billion in third-quarter write downs. Faced with the massive loss of capital, the New York-based investment banker said it plans to issue around $8.5 billion in new common stock.
American Processing Company LLC has agreed to acquire National Default Exchange, a mortgage default processing service, according to a statement from Dolan Media Co. -- which holds a majority interest in American Processing. The deal will help American Processing expand from just three Midwest states to California, Georgia and Texas, "three of the top 10 states experiencing prolific default-related activity."
Blackstone Capital Partners has acquired a minority interest in Bayview Asset Management LLC, a press release Monday said. Bayview, which currently manages a $2 billion fund that acquires whole mortgage loans and mortgage-backed securities, will use the capital to further its investments.
Bayview said it has closed loan purchase transactions with over 2,000 counter-parties since becoming active in the secondary mortgage market in 1995.
"With this investment from Blackstone, I am confident that Bayview is well positioned to take advantage of the significant dislocation in the secondary mortgage market," Bayview CEO David Ertel said in the statement.
CapitalSource Inc. reported Friday that subsidiary CapitalSource Bank completed the acquisition of approximately $5.2 billion in retail deposits and $5.2 billion in assets from troubled Fremont Investment & Loan. The new bank also purchased $2.1 billion in commercial loans from the parent.
"The most important thing to have in a liquidity crisis is liquidity, which we have," CapitalSource Chairman and CEO John K. Delaney boasted in the announcement. "We now have the liquidity and capital to take advantage of extraordinarily attractive market conditions which will permit us to rapidly grow our commercial lending franchise."
With the Fremont deal done, a press release was issued Monday indicating CapitalSource Bank opened 22 branches with more than 65,000 current customers and approximately 350 employees.
Written Agreement among Capital Corp of the West, Merced, California, County Bank, Merced California, and Federal Reserve Bank of San Francisco, San Francisco, California
Docket No. 08-014-WA/RB-HC and 08-014-WA/RB-SM
OCC Enforcement Actions
Numbers 2008-053, 2008-054, 2008-055, 2008-056, 2008-057, 2008-058, 2008-059, 2008-060, 2008-061, 2008-062, 2008-063, 2008-064, 2008-065, 2008-066, and 2008-067