Southland thrift is closed and sold
Regulators shut down La Jolla Bank in San Diego County on Friday night and sold its remains to OneWest Bank, the Pasadena thrift that emerged from the ruins of failed mortgage giant IndyMac.
The 10 branches of Rancho Santa Fe-based La Jolla were to open as scheduled on Monday as offices of OneWest, the company and regulators said. OneWest agreed to assume all $2.8 billion in deposits at La Jolla and to acquire nearly all of its $3.6 billion in loans and other assets.
The Federal Deposit Insurance Corp. agreed to share losses on $3.3 billion of the assets. It estimated the failure would cost its deposit insurance fund $882.3 million.
OneWest is owned by a group of private investors led by Steven Mnuchin, chairman of Dune Capital Management. The group also includes hedge fund operators George Soros and John Paulson, bank buyout specialist J. Christopher Flowers and Michael S. Dell, founder of computer maker Dell Inc.
The group’s acquisition of the former IndyMac from the FDIC last March already appears to be a great success, yielding it a $1.57-billion profit last year. One-
West also acquired First Federal Bank of Los Angeles when it failed in December.
Like many banks that failed this year and last, La Jolla ran into trouble making commercial loans, particularly to developers and builders, that went bad as the economy faltered.
Established in 1985 as La Jolla Village Savings, the thrift has three San Diego County branches, three in Riverside County, two in Orange County, one in Beverly Hills and one in Dallas.
Regulatory records show that La Jolla consented last September to an order issued by the U.S. Office of Thrift Supervision, requiring it to raise capital by Dec. 31, restrict dividends and reduce its troubled assets. The order barred La Jolla from making any more construction and land loans and restricted its ability to renew existing ones.
The bank submitted a capital restoration plan to the regulators Feb. 5, but they rejected it as inadequate and ordered the bank Tuesday to find a buyer for itself or risk seizure.
La Jolla depositors can continue to write checks and use ATM or debit cards to access their money, the FDIC said. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.
