The Federal Deposit Insurance Corp. or FDIC, announced Friday the shuttering of a small bank in California, taking the count of total U.S. bank closures in 2014 to 17, after 24 in 2013, 51 in 2012, 92 in 2011 and the 157 bank closures in 2010.
Frontier Bank, FSB, Palm Desert, California is the 17th FDIC-insured institution to fail in the nation this year, and the first in California. The last FDIC-insured institution closed in the state was Palm Desert National Bank, Palm Desert, on April 27, 2012.
The bank was closed on Friday by the Office of the Comptroller of the Currency, which appointed the Federal Deposit Insurance Corporation as receiver. The FDIC entered into a purchase and assumption agreement with Bank of Southern California, N.A., San Diego, California, to assume all of the deposits of Frontier Bank, FSB.
The two branches of Frontier Bank, FSB, did business as El Paseo Bank, will reopen as branches of Bank of Southern California, N.A. during their normal business hours.
The FDIC noted that Depositors of Frontier Bank, FSB will automatically become depositors of Bank of Southern California, N.A. Deposits will continue to be insured by the FDIC.
Customers of Frontier Bank, FSB should continue to use their current branch until they receive notice from Bank of Southern California, N.A. that systems conversions have been completed to allow full-service banking at all branches of Bank of Southern California, N.A.
Depositors of Frontier Bank, FSB can continue to access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.
As of June 30, 2014, Frontier Bank, FSB had approximately $86.4 million in total assets and $82.1 million in total deposits. Bank of Southern California, N.A. will pay the FDIC a premium of 1.06 percent to acquire all of the deposits of Frontier Bank, FSB. In addition to assuming all of the deposits of Frontier Bank, FSB, Bank of Southern California, N.A. agreed to purchase essentially all of the failed bank's assets.
The 24 bank closures in 2013 were sharply down from 51 in 2012, 92 in 2011, the peak of 157 in 2010 in the wake of the financial crisis, and 140 in 2009, but about similar to the 25 bank failures in 2008. Meanwhile, only three banks failed in 2007, and a total of 23 in the six years prior to that. The highest and all time record for bank closures was in 1989 when 534 banks closed, followed by 181 bank failures in 1992.
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