Another Bank Bites the Dust

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    NEWSLETTERS

    Alliance Bank's five offices will reopen Monday as branches of California Bank & Trust, and depositors of Alliance Bank will automatically become depositors of California Bank & Trust. Deposits will continue to be insured by the FDIC.

    The California Department of Financial Institutions has closed Alliance Bank of Culver City, and the Federal Deposit Insurance Corp. was named receiver.

    To protect depositors, the FDIC entered into a purchase and assumption agreement with California Bank & Trust of San Diego to assume all of the deposits of Alliance Bank.

    Alliance Bank's five offices will reopen Monday as branches of California Bank & Trust, and depositors of Alliance Bank will automatically become depositors of California Bank & Trust. Deposits will continue to be insured by the FDIC.

    Customers of both banks should continue to use their existing branches until California Bank & Trust can fully integrate the deposit records of Alliance Bank.
      
    Over the weekend, depositors of Alliance Bank 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.

    At the end of 2008, Alliance Bank had total assets of about $1.14 billion and total deposits of $951 million. In addition to assuming all of the deposits of the failed bank, including those from brokers, California Bank & Trust agreed to purchase about $1.12 billion in assets at a discount of $9.9 million.

    The FDIC will retain the remaining assets for later disposition.

    The FDIC and California Bank & Trust entered into a loss-share transaction under which California Bank & Trust will share in the losses on the asset pools covered under the loss-share agreement.

    The loss-sharing arrangement is projected to maximize returns on the assets covered by keeping them in the private sector. The agreement also is expected to minimize disruptions for loan customers, as they will maintain a banking relationship.
      
    The FDIC estimates that the cost to the Deposit Insurance Fund will be $206 million.
      
    California Bank & Trust's acquisition of all deposits was the "least costly" resolution for the FDIC's Deposit Insurance Fund, according to the FDIC.

    Customers with questions about the bank takeover can call the FDIC toll free at (800)523-8275, or visit the FDIC's Web site at www.fdic.gov/bank/individual/failed/alliance.html.