HAWAII NATIONAL BANK, HONOLULU, HAWAII, ASSUMES INSURED DEPOSITS OF BANK USA, N.A., KIHEI (MAUI), HAWAII
FOR IMMEDIATE RELEASE
FDIC: Andrew Porterfield (714) 442-1131
OCC: Frank Vance (202) 874-4700
Hawaii National Bank, Honolulu, Hawaii, has assumed the
insured deposits of Bank USA, N.A., Kihei (Maui), Hawaii, after Bank
USA was closed today by the Office of the Comptroller of the Currency
(OCC) and the FDIC was named receiver.
Bank USA, N.A., with assets of about $9.5 million as of March 31,
1995, was closed because the OCC used its authority under the Federal
Deposit Insurance Improvement Act of 1991 (FDICIA) when it found out
that Bank USA was critically undercapitalized -- that is, it had less
than two percent tangible equity capital. The bank suffered from poor
asset quality, poor earnings, high overhead and ineffective board and
management supervision. As a result, it never achieved an annual profit.
Over time, the bank incurred losses that ultimately depleted substantially
all of its capital. In light of these findings, the OCC determined that
closure and appointment of a receiver were necessary to protect the
interests of the bank's insured depositors.
Bank USA, N.A., received its national bank charter on March 10,
1982, as Aloha National Bank.
The two offices of the failed bank will reopen on Monday, May 22,
1995, as branches of Hawaii National. Customers of the failed bank
automatically will become depositors of the assuming bank.
Hawaii National will assume about $8.9 million in 1,000 deposit
accounts. At the time Bank USA was closed, about $248,000 in 12 accounts
exceeded the federal insurance limit of $100,000 and will not be assumed
by Hawaii National.
The FDIC Board of Directors also voted to make a prompt 65 percent
advance dividend payment to uninsured depositors. FDIC claims agents can
be contacted to meet with uninsured depositors beginning on Monday, May 22,
at (808) 879-8877.
The assuming bank will pay a premium of $50,000 for the right to
receive the failed bank's deposits and will purchase approximately $4.1
million of the failed bank's assets.
The Board of Directors approved the deposit assumption under its
authority to do so whenever it determines that such a transaction will
reduce the potential loss to the FDIC. The FDIC notes that its claim on
recoveries from the sale of the failed bank's assets will have priority
over non-depositor creditors of the failed bank.