Regulators Close CommerceBank and Guardian Federal
Regulators closed two Orange County financial institutions with more than $200 million in deposits late Friday but said it will be business as usual for their retail customers on Monday morning.
CommerceBank, a 15-year-old Newport Beach business bank, was seized and closed by state regulators, while federal thrift regulators shut down Guardian Federal Savings in Huntington Beach.
CommerceBank, which has been on the state’s list of troubled banks since 1990, was “operating in an unsafe manner, which necessitated the closure as protection to depositors and creditors,” said James E. Gilleran, state banking superintendent.
The bank’s Newport Beach headquarters and its branch in Orange will open Monday as offices of Covina-based California State Bank, while branches in Costa Mesa and Long Beach will be closed and their retail accounts shifted to the Newport Beach office.
Just last month, the bank delayed a $14-million stock offering that would have brought in badly needed capital and could have helped stave off the closure. Bank officials said the offering was postponed because of publicity about CommerceBank’s ties to First Pension Corp., an Irvine pension management firm that allegedly lost $121 million of investors’ retirement funds.
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As a custodian for First Pension, Commerce held about $10 million in clients’ retirement funds from 1990 to 1993. Bankers pulled the stock sale, fearing that people who used First Pension to direct their retirement funds would take legal action against the thrift.
California State Bank acquired $40 million in CommerceBank deposits representing about 3,900 retail accounts. An additional $98 million in 700 institutional accounts at the bank was left for regulators to refund.
Deposits of up to $100,000 at banks and thrifts are insured by the Federal Deposit Insurance Corp.
All five offices and $87.4 million in deposits in 4,000 accounts at Guardian Federal Savings were transferred to giant Home Savings of America by the Resolution Trust Corp. The Guardian offices--in Huntington Beach, Long Beach, Hemet, Rancho Mirage and San Jose--will all open Monday as Home Savings branches.
