Eldorado Bancorp's Response to Orange County Bankruptcy: A Stable Outlook

Eldorado Bancorp, parent company of Eldorado Bank, has reassured investors about the impact of Orange County's bankruptcy filing on the company's operations. Despite the economic uncertainty, the bank's president, J.B. Crowell, maintains that Eldorado Bank has experienced no immediate impact from the bankruptcy. The bank's conservative investment practices, including a portfolio heavily invested in United States Treasury securities and over 80% of investments with maturities of less than one year, have helped to mitigate potential risks.

Key Takeaways:

• Eldorado Bank has no liquidity or credit exposure to Orange County deposits or other public agencies affected by the bankruptcy.
• The bank has identified no customers affected by the county's filing that could negatively impact the bank.
• The bankruptcy may actually benefit the bank on the deposit side, as consumers become increasingly conservative with their funds and focus on the safety of FDIC-insured bank deposits.
• Over 80% of the bank's $88 million portfolio is invested in United States Treasury securities, which Crowell considers the safest investment available.
• 82% of the portfolio's investments have maturities of less than one year, allowing the bank to respond quickly to the current economic environment.
• Eldorado Bank operates three commercial loan centers and 10 retail branches in Orange County and the Inland Empire.

Statistics:

• Over 80% of the bank's portfolio is invested in United States Treasury securities ($70.4 million out of $88 million).
• 82% of the portfolio's investments have maturities of less than one year ($72.16 million).
• The bank's $88 million portfolio represents the majority of its assets.
• The nation's largest mutual fund announced a $2 billion accounting error, affecting several financial instruments and municipal bond funds.

Sources:

• BUSINESS WIRE website, December 12, 1994, Original Source