The Federal Deposit Insurance Corporation (FDIC), which had been acting as receiver for the stricken First Federal Bank, agreed to the deal in order to protect depositors.
First Federal Bank had $4.5 billion in deposits and $6.1 billion in total assets, all of which have been purchased by OneWest.
It did not pay a premium to FDIC for the deposits, but instead entered into a loss-share transaction on $5.3 billion of the assets.
OneWest Bank was only formed in March when a group of private equity investors and hedge funds bought the assets of the failed IndyMac Federal Bank from FDIC.
First Federal Bank of California was one of seven banks to be closed last week, with the demise of Imperial Capital Bank, New South Federal Savings Bank, Independent Bankers' Bank, RockBridge Commercial Bank, Peoples First Community Bank and Citizens State Bank taking the number of bank failures in the US this year to 140.
Written by Asim Shah