We aren't the troubled subprime lender
April 20, 2007
Fremont Bank: We aren't the troubled subprime lender
Silicon Valley / San Jose Business Journal - April 20, 2007
San Francisco's Fremont Bank wants its customers to know that it is in no way associated with Fremont General Corp., which has been ordered by federal regulators to stop its subprime lending activity.
Fremont Bank is a family-owned community bank with 24 branches in the Bay Area. While the bank does make residential as well as commercial loans, it is not a subprime lender.
Santa Monica-based Fremont General Corp. was ordered to cease and desist its subprime lending.
Fremont Bank says there has been customer confusion regarding the similarity of the names of the two separate companies. The bank has sent letters to customers trying to make sure they know that Fremont is not associated with the subprime lender, but was reaching out to the media to get the message out.
"We want our customers and our communities to be aware that Fremont Bank is in no way associated with Fremont General or its problems and that our institution is very well capitalized and stronger than it's ever been," says Fremont Bank President and CEO Bradford Anderson.
Subprime lending refers to mortgage lending that generally targets those with poor credit histories or little savings that can't afford the terms of market-rate loans. The subprime industry has come under fire recently as many subprime borrowers are facing foreclosure. Many of the loans introduced over the last several years had introductory rates that granted low monthly payments. As those introductory rates expire, payments are jumping to levels that those who qualified for the subprime loans can't afford to pay.
Fremont General was in talks to sell its residential lending business and the bulk of its subprime loans to an unnamed third party, the Washington Post reported April 16.
Greater Bay Bank to sell?
Rumors that Greater Bay Bank could be preparing for a sale have been fueled by the company's recent admission that its considering selling its insurance subsidiary ABD Insurance. The news was first reported in the San Francisco Business Times.
Keefe, Bruyette & Woods, an investment bank that tracks the industry, recently named Greater Bay as a potential takeover candidate. Greater Bay has consistently declined to comment on speculation that it plans to sell.
East Palo Alto-based Greater Bay Bank (NASDAQ: GBBK) is parent company of Santa Clara Valley bank and operates banks under seven other names. Greater Bay has 40 branches, all in Northern California.
New locations for Santa Cruz Bank
Santa Cruz County Bank will open a business lending office plus a new branch in Capitola.
The business lending office will be located at 1500 41st Ave. and will open in May. The new full-service branch will be located at 819 Bay Ave., Suite D, and will be the bank's fourth full-service branch.
Santa Cruz County bank has $132.5 million in assets and opened in February 2004.