America West Bank, Layton, Utah, was closed today by the Utah Department of Financial Institutions, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Cache Valley Bank, Logan, Utah, to assume all of the deposits of America West.
The failed bank's three offices will reopen on Monday as branches of Cache Valley Bank. Depositors of America West Bank will automatically become depositors of the assuming bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers of both banks should continue to use their existing branches.
Over the weekend, depositors of America West Bank can 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 December 31, 2008, America West Bank had total assets of approximately $299.4 million and total deposits of $284.1 million. Cache Valley Bank paid a discount of $352,000 to acquire all of the deposits of the failed bank.
Customers who have questions about today's transaction can call the FDIC toll-free at 1-800-523-8209. The phone number will be operational this evening until 9:00 p.m., Mountain Daylight Time (MDT); on Saturday from 9:00 a.m. to 6:00 p.m., MDT; on Sunday from noon to 6:00 p.m., MDT; and thereafter from 8:00 a.m. to 8:00 p.m., MDT. Customers who would like more information about today's transaction can also visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/americawest.html.
In addition to acquiring the failed bank's deposits, Cache Valley Bank agreed to purchase approximately $10.9 million in assets, with a 30-day option to purchase loans at book value. The FDIC will retain any remaining assets for later disposition.
The FDIC estimates that the cost to the Deposit Insurance Fund will be $119.4 million. Cache Valley Bank's acquisition of all of the deposits of America West Bank was the "least costly" resolution for the FDIC's Deposit Insurance Fund compared to alternatives.
America West Bank is the 32nd bank to fail in the nation this year and the second in Utah. The last FDIC-insured institution to fail in the state was MagnetBank, Salt Lake City, on January 30, 2009.
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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 8,305 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. The FDIC receives no federal tax dollars – insured financial institutions fund its operations.
FDIC press releases and other information are available on the Internet at www.fdic.gov, by subscription electronically (go to www.fdic.gov/about/subscriptions/index.html) and may also be obtained through the FDIC's Public Information Center (877-275-3342 or 703-562-2200). PR-63-2009