Regulators Shut Down 1st Centennial Bank in California

U.S. regulators have shut down 1st Centennial Bank in California, the third U.S. bank to fail in 2009, citing inadequate capital. The Federal Deposit Insurance Corporation [FDIC] was named receiver.

From the FDIC:

1st Centennial Bank, Redlands, California, was closed today by the California Department of Financial Institutions… To protect the depositors, the FDIC entered into a purchase and assumption agreement with First California Bank, Westlake Village, California, to assume the insured deposits of 1st Centennial.

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As of January 9, 2009, 1st Centennial had total assets of $803.3 million and total deposits of $676.9 million, of which there were approximately $12.8 million that exceeded the insurance limits…1st Centennial also had approximately $362 million in brokered deposits that are not part of today’s transaction.

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First California agreed to assume the insured deposits for a 5.29% premium. It will also purchase approximately $293 million of the failed bank’s assets. The assets are comprised mainly of cash, cash equivalents and marketable securities. The FDIC will retain the remaining assets for later disposition.

The cost to the FDIC’s Deposit Insurance Fund is estimated to be $227 million. 1st Centennial is the third bank to fail this year, and the first in California since Downey Savings and Loan, F.A., Newport Beach, was closed on November 21, 2008.

FDIC said patrons of 1st Centennial will continue to have full access to their deposits.