Countrywide Bank reports that customers, who were taking money from the savings bank, are depositing money again.
The bank last week recorded its second-biggest day of the year for new money and new customers, said Pierre Habis, a managing director with the bank overseeing retail and commercial operations.
“It has been closer to business as usual,” he said.
It was a much different story two weeks ago, when customers concerned about the financial health of the bank’s parent company, Countrywide Financial, began showing up at branches.
They came in person after having difficulty getting through online or using overworked phone lines.
“We had a lot of people coming into some of our locations, asking about FDIC insurance. Some of them were withdrawing money,” Habis said.
Centennial resident Erlin Leonard was among those concerned. She and her mother hold accounts at the bank, which has three metro locations.
She was able to move funds in her mother’s certificate of deposit above $100,000, the FDIC limit for insurance, into an insured money-market account.
“We like the rates they pay,” she said.
Habis attributes the reversal in sentiment to media attention and a campaign offering high rates for CDs and savings accounts.
The bank is offering a 5.4 annual percent yield on passbook savings, a 5.5 percent yield on its online savings account and a 5.65 percent yield on a 12-month certificate of deposit.
, which monitors interest rates on deposit, money-market and loan accounts, reports an average yield on one-year CDs nationally of 4.86 percent.
The crisis proved a good lesson in why bank customers need to monitor their deposits to make sure they are within the limits insured by the Federal Deposit Insurance Corp.
Habis said bank workers spent much of their time explaining to customers how they could hold accounts in different ways, such as jointly or in a trust, to obtain higher insurance limits. Certain retirement accounts can also hold up to $250,000.
It is too early to say whether more money was taken out of the bank than was recently deposited, Habis said.
Countrywide boasted more than $107 billion in assets before the current crisis, which resulted when the parent company lost access to commercial credit markets and a Merrill Lynch analyst warned of a credit crunch that could push the firm into bankruptcy protection.
Countrywide was able to tap an $11.5 billion credit line from a consortium of banks last week. On Wednesday, Bank of America said it would make a $2 billion equity investment into the company.
A collapse of Countrywide Financial, which services about one out of every five mortgages in the country, could prove devastating for consumer confidence. But Habis said the bank is a separate entity, with its own deposits and loans.
Countrywide executives plan to use deposits at the savings bank to fund more mortgages, a more traditional model, now that outside investors are boycotting mortgage- backed bonds without any government guarantees.
That strategy, however, depends on customers’ maintaining deposits with the bank.
Staff writer Aldo Svaldi can be reached at 303-954-1410 or asvaldi@denverpost.com.
This article has been corrected in this online archive. Originally, due to a reporting error, it included an incorrect rate for the passbook savings account. The rate should be 5.4 percent.
