One West Bank, newly chartered in early 2009, is the banking industry’s biggest success story. At a time when many banks are failing or struggling with nonperforming loans and slow growth, One West has earned almost $2 billion in profits for its founders by acquiring three failed banks, including giant IndyMac Bank which failed in 2008.
One West Bank’s phenomenal success had been discussed previously in ProblemBankList in February of this year when One West reported huge profits from its first year of operations.
OneWest Bank, FSB, is the fastest growing bank in the country since being newly formed in early 2009 by a group of private Wall Street investors for the express purpose of acquiring failed banks from the FDIC. OneWest’s first acquisition was done on March 19, 2009, when it acquired the $32 billion asset Indy Mac Bank which had failed in July 2008. In December 2009, OneWest acquired another large failed bank, First Federal Bank of Los Angeles, which had $6.1 billion in assets at the time of closing. With this week’s acquisition of La Jolla Bank, One West is now a banking empire with over $40 billion in assets acquired from the FDIC.
The FDIC has been heavily criticized lately by those who question whether OneWest got too good of a deal on its purchase of failed banks. Indy Mac was the most costly banking failure in U.S. history at $10.7 billion and the FDIC could still face billions more in losses under its loss-share transactions with OneWest. The question of whether OneWest received a windfall at taxpayer expense became even more relevant this week when OneWest reported huge profits of $1.6 billion last year.
The private investors who formed OneWest had initially contributed only $1.55 billion. Bert Ely, a well respected banking consultant remarked that “This is one hell of a deal for those owners, but hardly a good deal for the banking industry, which pays the FDIC’s bills. These are just incredibly sweet numbers..The public policy question is, why are they so good? Particularly given the magnitude of the loss estimated at the FDIC.”
One West Bank has now made another acquisition (this time without FDIC assistance) with the purchase of a $1.4 billion real estate portfolio from Citigroup at an undisclosed purchase price.
Chief Executive Joseph Otting of One West said “We are excited to add quality earning assets to our balance sheet. This portfolio represents our ongoing commitment to commercial real estate lending”.
Citigroup has had its own share of problems with nonperforming loans and has been disposing of assets that no longer fit into its revised business model.
Based on the shrewd acquisitions previously made by One West’s management, it’s my bet that Citigroup got the worst end of deal with One West.
The success of One West Bank is directly related to the number of homes they stole. Their method was to lie to homeowners, offer them a super modification because of “your excellent payment record” and all you have to do is wait for it in the mail, AND DON’T PAY IN THE MEANTIME- UP TO 9 MONTHS. I called them back with a witness on speaker phone and asked them to repeat what they said, asked why I was not to pay in the meantime. “You’ll screw up the paperwork”, they said, since we now have all your information.) “Won’t there be fees for fines”, I asked. “Oh no, there will be none of that.” Then they piled on $120,000 said I was underwater in Bankruptcy Court – my only last minute option because they did not notify me. All their paperwork is Robo signed, there is no legal deed. The Realtor showed up with Sheriffs, with no 5 day notice, and no Judges order of eviction. I was helpless. 38 years I paid the mortgage and improved my property and had $600,000 in equity. The Realtor- back by their phony lawyers stole everything I own – and my families archives. Two houses. I fought in court with no lawyer for a long time. They lied and produced dirty paper. I had to educate myself. They broke every law. They are finally losing.
How dare you call them a success story. Their own insurance Co. sued them, there’s still a class action on them, and I have just begun to sue. In Calif. stealing the equity of a Senior is another law they broke. Also, the Trust in lending laws – Tila. What Bunk!