U.S. Bank Acquires Downey Savings & Loan and PFF Bank & TrustMINNEAPOLIS, Nov 21, 2008 (BUSINESS WIRE) -- U.S. Bancorp announced today that, effective immediately, its lead bank, U.S. Bank National Association, has acquired the banking operations of two separate California financial institutions from the Federal Deposit Insurance Corporation. The two acquired institutions are Downey Savings & Loan Association, F.A., the primary subsidiary of Downey Financial Corp., headquartered in Newport Beach, Calif. and PFF Bank & Trust, a subsidiary of PFF Bancorp Inc., headquartered in Rancho Cucamonga, Calif.
Under the terms of these transactions, U.S. Bank will receive approximately $12.8 billion of assets and assume approximately $11.3 billion of liabilities, including $9.7 billion of deposits, of Downey Savings & Loan and will receive approximately $3.7 billion in assets and assume approximately $3.5 billion of liabilities, including $2.4 billion of deposits, of PFF Bank & Trust. As part of the transactions, U.S. Bank has agreed to assume the first $1.5 billion and $0.1 billion of expected losses on the assets of Downey Savings & Loan and PFF Bank & Trust, respectively. Any losses in excess of these amounts will be subject to a loss sharing agreement with the FDIC. U.S. Bank will not acquire any assets or liabilities of the banks' parent holding companies, Downey Financial Corp. or PFF Bancorp Inc. These acquisitions are expected to meet or exceed the company's internal financial hurdles for internal rate of return and earnings per share accretion.
"The timing of this transaction could not be better, as we have just completed the highly successful integration of our Mellon 1st Business Bank acquisition in Los Angeles and Orange County. With the addition of the Downey Savings & Loan and PFF Bank & Trust branch locations, we continue to widen our distribution network in our growing California and Arizona markets," commented Joseph M. Otting, vice chairman of commercial banking and U.S. Bancorp's Western U.S. senior executive. "Once the conversions and integrations are completed, both current and new customers of U.S. Bank will have the increased convenience of 561 branches in California and 75 branches in Arizona to serve their banking needs. This also presents a great opportunity for us to deepen customer relationships by offering U.S. Bank's extensive mix of products and services to our new customers."
As part of these transactions, U.S. Bank will modify the terms of certain acquired residential mortgage loans in accordance with the FDIC Mortgage Loan Modification Program. The objectives of this program are to improve affordability, increase the probability of performance, and allow borrowers to remain in their homes.
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Community Bank of Loganville, Georgia, Is Shuttered (20th failure of the year)Nov. 21 (Bloomberg) -- Community Bank of Loganville, Georgia, was closed by a state regulator today, the 20th U.S. bank seized this year as foreclosures rise and home prices extend declines in the worst housing slump since the Great Depression.
Bank of Essex in Tappahannock, Virginia, will take over all of the $611.4 million of deposits from Community Bank, the Federal Deposit Insurance Corp. said today in an e-mailed statement. Community Bank’s four offices will open Nov. 24 as Bank of Essex branches.
“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,” the FDIC said.
Regulators this year have closed the most banks since 1993, including 15 since July, and the collapses of Washington Mutual Inc. and IndyMac Bancorp Inc. were among the biggest in history. The U.S. is seeking to boost bank capital and avert failures using $250 billion from a bank-rescue fund enacted after the housing slump and tightening credit froze markets.
Bank of Essex will buy about $84.4 million of the failed bank’s $681 million in assets, with the FDIC retaining the rest for later disposition. It paid a premium of $3.2 million to assume the deposits, the FDIC said. The transaction will cost the deposit insurance fund, supported by fees on insured banks, $200 million to $240 million, the agency said. Community Bank opened in 1946.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aF0ypKlGplsw&refer=homeSee you next Friday!