FDIC Seizes, Sells Cal National, Eight Others

The three California banks all have significant commercial real estate lending operations, according to their web sites. Cal National is a leading multifamily and commercial real estate lender in Southern California, according to the bank's web site, which says that it lends for all types of multifamily, commercial and construction needs. The other two California banks among the nine were San Diego National Bank with 28 branches and Pacific National Bank in Northern California with 17 branches.

San Diego National Bank provides construction loans on most types of commercial properties, mini-perm loans for longer-term financing and loans for acquisition and development, according to the bank's web site. Pacific National offers acquisition, new construction and repositioning loans from $7 million to $150 million, according to its web site. It lists office, retail, industrial, multifamily and hotel loans among its offerings.

The FDIC estimates that the cost of the nine banks to the Deposit Insurance Fund will be a combined $2.5 billion. US Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC, compared to alternatives, according to a statement from the FDIC. The failure of the nine banks brings the nation's total number this year to 115.

The FDIC's seizure of the nine banks owned by FBOP Corp. followed a failed effort by FBOP Corp. to raise new capital to avoid the takeover. According to an agreement between the Federal Reserve Board and FBOP Corp. that was signed on Aug. 28, FBOP had 30 days to submit a plan to maintain sufficient capital and 30 days to submit "an acceptable written plan to reduce FBOP's concentrations of commercial real estate loans." The agreement was signed by FBOP chairman/CEO Michael E. Kelly and by Douglas J. Kasl, vice president of the Federal Reserve Bank of Chicago.

US Bank's acquisition of the three California banks marks the second major expansion in the state for the Minneapolis-based bank holding company, which also acquired failed Downey Savings Bank last year. The other six FBOP banks acquired by US Bank were Park National Bank in Chicago with 31 branches; BankUSA in Phoenix with two branches; Community Bank of Lemont in Lemont, IL with one branch; and three Texas banks with one branch each: North Houston Bank in Houston, Citizens National Bank in Teague and Madisonville State Bank in Madisonville.

US Bank said in a press release that it will receive approximately $18.4 billion of assets and assume approximately $18.3 billion of liabilities in its deal with the FDIC, including $15.4 billion of both insured and uninsured deposits. According to the FDIC, the federal agency and US Bank entered into a loss-sharing agreement on approximately $14.4 billion of the $18.3 billion in assets that US Bank is acquiring.