TV vans and reporters gathered outside First Heritage Bank in Newport Beach Monday morning after it was seized last week by the Federal Deposit Insurance Corp. for being undercapitalized.
The FDIC said Friday evening that First Heritage and First National Bank of Nevada, both owned by Arizona-based First National Bank Holding Co., had failed and their deposits had been bought by insurer Mutual of Omaha Cos.
The media had gathered in hopes of covering another situation like that of Pasadena’s IndyMac Bank, which failed earlier this month.
So far, no rush of depositors to get their money out of First Heritage has been reported.
First Heritage was a commercial bank with mostly businesses as customers. Bad loans to developers and homebuilders in Arizona and Nevada led to its failure.
It had deposits of $254 million and deposits of $233 million as of the end of last June.
With three branches, including in Los Angeles and Ontario, First Heritage’s strategy was to collect deposits from businesses and lend for real estate developments.
First National of Nevada had a similar strategy with its 25 branches across Arizona, Nevada and Southern California. It held assets of $3.4 billion and deposits of $3 billion.
Mutual of OmahaBank will operate the branches of the two banks.
Accounts with balances over the FDIC insured amount of $100,000 were transferred to Mutual of OmahaBank, according to a release.
Customers maintained ATM and checking access throughout the seizure, the release said.
Of the 10 banks that have failed over the past two years, this is the second time that a bank has bought all of the deposits of one of them, according to the FDIC.
