Fremont General completes sale of bank subsidiary

By Caroline Salls

Pittsburgh, July 25 - Fremont General Corp. said it has completed the sale of a substantial portion of the assets of wholly owned bank subsidiary Fremont Investment & Loan to CapitalSource Bank, according to a company news release.

As previously reported, the sale includes all of Fremont Investment & Loan's branches and 100% of its $5.2 billion in deposits.

Specifically, Fremont said CapitalSource Bank acquired Fremont Investment & Loan's entire retail branch network of 22 offices, its participation interest in previously sold commercial real estate loans, real and personal property, cash and some of the bank's other assets, according to the release.

As a result of this transaction, Fremont Investment & Loan received a net premium of roughly $100 million for the assumed deposits and transferred assets.

Fremont said the parties will confirm the final dollar amount of assets sold and deposits assumed by CapitalSource Bank within 30 days of the closing through preparation of a final closing statement.

Following the transfer of its branches to CapitalSource Bank, Fremont said Fremont Investment & Loan will no longer accept deposits or conduct any other traditional banking functions of a California industrial bank.

In addition, within the next few days, Fremont Investment & Loan will relinquish its federal deposit insurance to the Federal Deposit Insurance Corp. and surrender its charter to California.

However, Fremont said the bank will continue as a California corporation and will change its name to Fremont Reorganizing Corp.

CapitalSource Bank is a newly formed California industrial bank and indirect wholly owned subsidiary of CapitalSource Inc.

Fremont General, a financial services holding company located in Santa Monica, Calif., filed for bankruptcy on June 18 in the U.S. Bankruptcy Court for the Central District of California. Its Chapter 11 case number is 08-13421.

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