"With Heritage Bank your pay stopped at 6 p.m. At 6:01, you went on a pay which is paid by the FDIC. Unused vacation time, you will be paid for. You will not lose it," Cook reassured the bank's employees.
In that moment, Cook agreed that operation "HAPPY" looked pretty grim. "Because I would say a large majority of the employees don't know that the bank is in trouble and that it's about to close until we walk through the door," he told Pelley.
"We want it to be as seamless as possible for your depositors so no depositor loses any money at all," Bates told employees.
"They reacted with dismay and shock that we were there and it's a very trying period for them," Bates told Pelley. "So it is an end to a whole chapter in their lives."
"When we walk in we appear to be the bad guy," Cook said.
"Some of those people had been there more than 20 years," Pelley pointed out.
"And those are the ones who take it the hardest because they feel that they have put their life into it and now it's no longer there," Cook replied.
The employees now worked for the FDIC. A public notice went up, which was the signal to a team of nearly 80 people to take over the bank.
They took control of the bank Web site, adding a notice that all deposits were safe. Then they started an inventory of all the assets and liabilities.
They broke the news to the media and prepared to reopen the bank Saturday morning as usual. Asked what she expected from the customers, Bates told Pelley, "I think the customers will, some of them will come in with a sense of fear."
Fear created the FDIC in 1933 after the Depression set off a panic that wiped out even healthy banks.
"We've been around for 75 years and nobody's ever lost a penny of insured deposits," FDIC head Sheila Bair told Pelley. "…which is why you need to make sure you are below the insured deposit limits."
Bair told Pelley the insured deposit limit is $250,000 right now.
"When the FDIC comes in and makes depositors whole at a bank that has failed, is that tax money?" Pelley asked.
"No. It is money from our reserves which, and we are funded by insurance premiums that are assessed on banks. So, no it's not taxpayer money," Bair explained.
Bair is a former Treasury official and professor of finance who has written children's books on the wisdom of saving.
"Maybe the CEOs on Wall Street should have read the children's books," Pelley joked.
"Maybe so," Bair replied, laughing. "Maybe so."