On Friday, December 25 the First Federal Bank of California joined the list of 16 Californian banks that have closed this year, ending its 80 years in business. The bank opened its’ first Santa Monica office in 1929.
First Federal and its parent company, FirstFed Financial Corp., were staples of the Santa Monica financial community for years, with corporate headquarters in the building that bore their name at Wilshire Boulevard and Fourth Street. The company was a frequent sponsor of local nonprofit endeavors, including the Westside Shelter and Hunger Coalition’s Super Bowl-a-thon for which it has been the “Perfect Game” title sponsor for six consecutive years.
The bank reportedly was shut down by federal regulators due to their continued poor performances. OneWest Bank, which was formed earlier this year from the remains of failed mortgage lender Indy Mac. and already generating hefty profits, purchased First Federal and it’s 6.1 billion in assets. According to FDIC documents, OneWest paid $401 million or a 6.6% premium for First Federal’s assets.
The first downside signal came earlier in the year when the First Federal was forced to halt lending. The deposit will continue to be insured by FDIC, therefore the customers can retain their deposit insurance coverage.