Bank of Southern California, N.A., San Diego, California, Assumes All of the Deposits of Frontier Bank, FSB, d/b/a El Paseo Bank, Palm Desert, California
November 7, 2014
Frontier Bank, FSB, Palm Desert, California was closed today by the Office of the Comptroller of the Currency, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Bank of Southern California, N.A., San Diego, California, to assume all of the deposits of Frontier Bank, FSB.
The two branches of Frontier Bank, FSB, doing business as El Paseo Bank, will reopen as branches of Bank of Southern California, N.A. during their normal business hours. Depositors of Frontier Bank, FSB will automatically become depositors of Bank of Southern California, N.A. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage up to applicable limits. Customers of Frontier Bank, FSB should continue to use their current branch until they receive notice from Bank of Southern California, N.A. that systems conversions have been completed to allow full-service banking at all branches of Bank of Southern California, N.A.
Depositors of Frontier Bank, FSB can continue to 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.
As of June 30, 2014, Frontier Bank, FSB had approximately $86.4 million in total assets and $82.1 million in total deposits. Bank of Southern California, N.A. will pay the FDIC a premium of 1.06 percent to acquire all of the deposits of Frontier Bank, FSB. In addition to assuming all of the deposits of Frontier Bank, FSB, Bank of Southern California, N.A. agreed to purchase essentially all of the failed bank's assets.
Customers with questions about today's transaction should call the FDIC toll-free at 1-800-528-6215. The phone number will be operational this evening until 9:00 p.m.; Pacific Standard Time (PST); on Saturday from 9:00 a.m. to 6:00 p.m., PST; on Sunday from noon to 6:00 p.m., PST; on Monday from 8:00 a.m. to 8:00 p.m., PST; and thereafter from 9:00 a.m. to 5:00 p.m., PST. Interested parties also can visit the FDIC's Web site at https://www.fdic.gov/bank/individual/failed/elpaseo.html.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $4.7 million. Compared to other alternatives, Bank of Southern California, N.A.'s acquisition was the least costly resolution for the FDIC's DIF. Frontier Bank, FSB is the 17th FDIC-insured institution to fail in the nation this year, and the first in California. The last FDIC-insured institution closed in the state was Palm Desert National Bank, Palm Desert, on April 27, 2012.
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Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's banking system. The FDIC insures deposits at the nation's banks and savings associations, 6,656 as of June 30, 2014. It promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. The FDIC receives no federal tax dollars — insured financial institutions fund its operations.
FDIC press releases and other information are available on the Internet at www.fdic.gov, by subscription electronically (go to www.fdic.gov/about/subscriptions/index.html) and may also be obtained through the FDIC's Public Information Center (877-275-3342 or 703-562-2200). PR-97-2014