Thrift Seized; Deposits Sold to Union Bank
Heartland Savings was seized by thrift regulators on Friday, and its insured deposits were sold to Union Bank.
Resolution Trust Corp. regulators took possession of the three-branch thrift at 6 p.m. Friday as part of the Accelerated Resolution Program by which regulators dispose of some or all of a failed thrift’s assets at the same time that it is seized.
Heartland’s main office in El Cajon and branches in La Mesa and Casa de Oro will reopen as scheduled Monday morning. Insured deposit accounts of up to $100,000 each are not at risk. RTC supervisor Angela Whitney said none of Heartland’s 40 employees will immediately be laid off.
Heartland has assets of $125.6 million and liabilities of $122.5 million, meaning the thrift apparently had positive net worth. Without commenting specifically on Heartland’s situation, Whitney said thrifts can be seized for a variety of reasons besides insolvency, including low asset quality and having a high percentage of loans on regulators’ “watch list.”
Union Bank acquired $120.9 million in deposits in 9,800 separate Heartland accounts. To get them, Union Bank paid $112,850 in cash and assumed responsibility for about $812,000 in exit fees from the Savings Assn. Insurance Fund and entry fees for the Bank Insurance Fund.
“It was available and reasonably priced and an opportunity for us to pick up some market share in the area,” said Ron Kendrick, Union Bank’s senior vice president in charge of retail banking in San Diego. Union Bank has 56 branches in San Diego County including six in the La Mesa-El Cajon-Spring Valley area.
In a statement, Union Bank indicated that the three Heartland branches might eventually be shut down and the accounts moved to nearby Union branches.
Before Friday’s actions, the RTC had closed or sold 512 savings institutions since its creation in 1989.