IndyMac’s long shadow falls on Corona’s Vineyard Bank

E. Scott Reckard, Los Angeles Times

IndyMac Bank’s failure in July was expected to make matters worse for other ailing banks by spooking depositors. We’re now seeing that that wasn’t idle speculation.

Vineyard National Bancorp of Corona said Monday that housing-related losses and depositors’ withdrawal of funds after IndyMac’s collapse have cast doubt on its future and it must raise substantial amounts of capital to continue operations through this year.

A community bank with $1.8 billion in loans and $1.9 billion in deposits as of June 30, Vineyard had specialized in financing home builders. To fund its loans the bank relied on high-yielding certificates of deposit.

In its quarterly filing with the Securities and Exchange Commission on Monday, Vineyard said that “negative publicity relating to our financial results and the financial results of other financial institutions, together with the seizure of IndyMac Bank by federal regulators in July, has caused a significant amount of customer deposit withdrawals.” Read more….