Bank of Newport Seized; Accounts Are Transferred
As it predicted earlier this month, Bank of Newport was seized Friday by state and federal regulators and its accounts turned over to San Francisco-based Union Bank.
Bank of Newport’s five offices, two in Newport Beach and one each in Costa Mesa, Laguna Niguel and Encino, will reopen Monday as Union Bank branches, and depositors will automatically become Union Bank account holders.
The state Banking Department closed Bank of Newport after determining that its officials were unable to raise its capital to regulatory minimums. The bank announced last week that its capital had fallen below the acceptable level.
The bank had about $160 million in deposits, including $150 million in 19,000 fully insured accounts of $100,000 or less. About $10 million in accounts that exceeded the federal insurance maximum will not be assumed by Union Bank, officials said.
Account holders with uninsured deposits must apply for payment to the Federal Deposit Insurance Corp., which said it will pay out 50% of the funds pending final disposition of the bank’s assets.