Another Bank Bites It: First Federal Of Santa Monica To Be Taken Over
The UCLA Anderson Forecast, the president and the stock market (on some days) say the recession is over, but banks keep going bust. The latest victim was Santa Monica-based First Federal Bank, which was closed Friday by the federal Office of Thrift Supervision.
Pasadena-based OneWest Bank announced that it would take over First Federal, however, and likely keep all branches open. In fact, it boasts, the acquisition will create one of Southern California's largest banks. "This transaction is consistent with our strategy to expand the OneWest footprint in our home market of Southern California," stated OneWest Bank's Chairman Steven Mnuchin
The Los Angeles Business Journal describes 80-year-old First Federal as "one of L.A.'s oldest and largest financial institutions," but reports that the bank, like most of the 139 others that failed in the nation this year, was weighed down with billions of dollars worth of bad home loans and "was the longest surviving lender of risky option adjustable-rate mortgage loans."
First Fed opened in 1929 and survived the Great Depression.