FDIC APROVES THE ASSUMPTION OF THE INSURED DEPOSITS OF COMMONWEALH THRIFT AND LOAN, TORRANCE, CALIFORNIA
FOR IMMEDIATE RELEASE PR-65-96 (8-16-96)
Media Contact: David Barr (202) 898-6992
The Board of Directors of the Federal Deposit Insurance
Corporation today approved the assumption of the insured deposits
of Commonwealth Thrift and Loan, Torrance, California, by
Frontier State Bank, Redondo Beach, California.
Commonwealth, with total assets of $13.1 million as of May
31, was closed today by the California Superintendent of Banks,
and the FDIC was named receiver.
The failed institution's sole office will not reopen; however,
customers of Commonwealth will have access to their insured
deposits and can conduct banking activities at Frontier State Bank's
Redondo Beach office located at 2233 Artesia Boulevard beginning
Monday, August 19. Commonwealth's depositors will
automatically become depositors of the assuming institution.
Frontier State Bank will assume $10.8 million in about 370
deposit accounts. At the time Commonwealth was closed, about
$225,000 in seven accounts exceeded the federal insurance limit of
$100,000 and will not be assumed by Frontier State Bank.
The FDIC Board of Directors also voted to make a prompt
45 percent advance dividend payment to uninsured depositors. The
payment is based on anticipated recoveries from the sale of assets.
FDIC claims agents will be available to meet with uninsured
depositors beginning Monday morning at the failed bank's former
The assuming bank will pay a premium of $2,500 for the
right to receive the failed bank's deposits and will purchase $1.4
million of Commonwealth's assets. The FDIC will retain the
remaining $11.7 million of the failed bank's assets and estimates the
cost of this transaction to the Bank Insurance Fund (BIF) to be
approximately $1.4 million.
The FDIC notes that creditors holding deposit claims will
receive priority in payment from the sale of assets of the failed
institution over creditors holding non-deposit claims.
The FDIC Board of Directors approved the deposit
assumption under its authority to do so whenever it determines that
such a transaction will reduce the potential loss to the BIF.
Commonwealth is the first BIF-insured failure in California
this year, and the fifth in the U.S. An institution insured by the
FDIC's Savings Association Insurance Fund also failed this year,
bringing the total FDIC-insured institution failures in the year to
Congress created the Federal Deposit Insurance Corporation in
1933 to restore public confidence in the nation's banking system.
The FDIC insures deposits at the nation's 12,000 banks and savings
associations and it promotes the safety and soundness of these
institutions by identifying, monitoring and addressing risks to which
they are exposed.
FDIC press releases and other documents are available on the
Internet via the World Wide Web at www.fdic.gov or through
Gopher at gopher.fdic.gov. They may also be obtained through the
FDIC's Public Information Center, 801 17th Street, NW, Room 100,
Washington, DC ((703) 562-2200).