If three really is a trend, it looks like federal banking regulators are ready to clean up the U.S. mortgage mess after shutting down a third institution in two months.
Federal banking regulators seized the $32 billion in assets California-based IndyMac Bank on Friday afternoon and are working through the weekend to launch a suitor institution that is scheduled to open Monday morning, according to the Federal Deposit Insurance Corp.
IndyMac at one time had seven loan production offices in Florida, including one in Miami and another in Hollywood.
The FDIC, which insures deposits up to $100,000 per account, projects IndyMac’s failure will cost between $4 billion and $8 billion, ranking it as one of the largest bank failures in U.S. history.
Regulators intend to sell IndyMac’s assets within the 90 days to a single buyer at a deep discount.
This is the fifth U.S. bank this year shutdown by federal regulators, and the third in 60 days.
Regulators seized Minnesota-based First Integrity Bank with $54.7 million in total assets and $50.3 million in total deposits on May 30; Arkansas-based ANB Financial with $2.1 billion in total assets and $1.8 billion in total deposits on May 9; Missouri-based Hume Bank with total assets of $18.7 million and total deposits of $13.6 million on March 7; and Missouri-based Douglas National Bank with $58.5 million in total assets and $53.8 million in total deposits on January 25, according to the FDIC.
The last California institution to be shuttered by regulators was Southern Pacific Bank in Torrance on Feb. 7, 2003, according to the FDIC.
A Florida bank has not been seized since March 12, 2004, when regulators took over Guaranty National Bank of Tallahassee, which had assets of $74.1 million.
Based in Pasadena, Calif., IndyMac had total assets of $32.01 billion and total deposits of $19.06 billion as of March 31, 2008. In the last 11 days, depositors withdrew $1.3 billion from IndyMac, prompting the institution’s regulator, the Office of Thrift Supervision, to step in to avoid any more of a run on the bank, according to the BBC.
At the time of the seizure, IndyMac Bank, F.S.B. had about $1 billion of potentially uninsured deposits held by approximately 10,000 depositors. It is unclear what if anything these depositors will recoup.
“The FDIC will transfer insured deposits and substantially all the assets of IndyMac Bank, F.S.B., Pasadena, CA, to IndyMac Federal Bank, FSB,” according to the FDIC.
IndyMac was founded in 1985 by Angelo Mozilo, who went on to lead Countrywide Financial Corp. before its sale this month to Bank of America. IndyMac had 33 branches nationwide.
Peter Zalewski is a principal with the consulting company Condo Vultures®LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report
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