The Office of Comptroller of the Currency has closed Arizona-based Valley Capital Bank and has appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. In order to protect the depositors, the FDIC has entered into a purchase and assumption agreement with Missouri-based Enterprise Bank & Trust to assume all of the deposits of Valley Capital Bank
Valley Capital Bank’s sole branch will reopen as a branch of Enterprise Bank and deposits will be insured by the FDIC. However, customers can continue to use their existing branches until they receive notice from Enterprise Bank that it has completed systems changes to allow its other branches to process their accounts as well.
As of September 30, 2009, Valley Capital Bank had total assets of approximately $40.3m and total deposits of approximately $41.3m. Enterprise Bank paid the FDIC a 2% premium for the right to assume all of the deposits of Valley Capital Bank. In addition to assuming all of the deposits of the failed bank, Enterprise Bank agreed to purchase essentially all of the failed bank’s assets.
The FDIC and Enterprise Bank has also entered into a loss-share transaction on approximately $29.8m of Valley Capital Bank’s assets. Enterprise Bank will share in the losses on the asset pools covered under the loss-share agreement.
Valley Capital Bank is the 132nd FDIC-insured institution to fail in the US this year.
