San Joaquin Bank, Bakersfield, CA Fails 99th Bank Failure This Year
San Joaquin Bank in Bakersfield, California failed October 16th and makes the 99th bank failure in 2009. FDIC, in need of its own bailout, posted the following information:
San Joaquin Bank, Bakersfield, California, was closed today by the California Department of Financial Institutions, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. FDIC entered into a purchase and assumption agreement with Citizens Business Bank, Ontario, California, to assume all of the deposits of San Joaquin Bank.
The five branches of San Joaquin Bank will reopen on Monday as branches of Citizens Business Bank. Depositors of San Joaquin Bank will automatically become depositors of Citizens Business Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branch until they receive notice from Citizens Business Bank that it has completed systems changes to allow other Citizens Business Bank branches to process their accounts as well.
This evening and over the weekend, depositors of San Joaquin Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.
As of September 29, 2009, San Joaquin Bank had total assets of $775 million and total deposits of approximately $631 million. Citizens Business Bank did not pay the FDIC a premium for the deposits of San Joaquin Bank. In addition to assuming all of the deposits of the failed bank, Citizens Business Bank agreed to purchase essentially all of the assets.
The FDIC and Citizens Business Bank entered into a loss-share transaction on approximately $683 million of San Joaquin Bank’s assets. Citizens Business Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-share arrangement is projected to maximize returns on the assets covered by keeping them in the private sector.