Assets of First Federal Bank have been purchased by OneWest Bank, which was formerly the failed mortgage lender IndyMac, after it was shut down by US regulators. The deal is expected to provide the much needed support for private investment in banks.

On Friday, California based First Federal became one of the 7 US banks to have been closed by regulators, which has now taken the number of bank failures for the year to 140.

First Federal's 39 branches, which were previously under the wing of FirstFed Financial, are all set to reopen on Saturday as "OneWest Bank FSB".

The Pasadena, California based OneWest, in addition to assuming $4.5 Billion worth of total First Federal deposits, will also purchase all of the bank's assets which are worth $1.6 Billion, as has been confirmed by the Federal Deposit Insurance Corp.

The deal will be marked as OneWest's first since it was formed, specifically to manage IndyMac's assets earlier this year. The bank was put together by a group of investors of private equity and hedge funds.

The deal has come as much heartening news for other private investors who are looking to find a way to expand into the sector.