- Closed Bank: Alliance Bank
- Location: Culver City, CA
- Size: 5 branches, $1.14 billion assets, $951 million deposits
- Possible Uninsured Deposits: ALL deposits Transfered
- Acquiring Bank: California Bank and Trust
- Cost to Deposit Insurance Fund: $206 million (estimated)
- Financial Ratings: 0 star (lowest) at BauerFinancial, 1 star (lowest) at Bankrate.com
This closure is very similar to the one earlier today in Georgia. It's an All-Deposit Transfer transaction in which the new bank assumes all deposits, including those above the FDIC insurance limits. The new bank also assumes brokered deposits. However, California Bank & Trust may be changing interest rates. Here's what this FDIC Q&A states:
3. I am a deposit broker or have brokered deposits. What do I do?
As an All-Deposit Transfer transaction, the total of all deposit accounts, including brokered deposits, have been assumed by California Bank & Trust.
Be advised, however, that from and after the date of closing, the California Bank & Trust will accrue and pay interest on deposit liabilities at a rate it shall determine; accordingly, California Bank & Trust shall permit depositors, including brokered depositors, impacted by reduced rates to withdraw their deposits without penalty for early withdrawal.
I did have one post on Alliance Bank when it was offering a 4.50% 12 and 18-month CD back in September 2008. I have a feeling California Bank and Trust won't be keeping these rates.
Bankrate and BauerFinancial were again on target with the ratings for safety and soundness. Both gave the bank their lowest ratings. Alliance Bank was also on this Texas ratio list, but the ratio was much lower than the ratio of FirstBank that failed earlier today.