2009 Bank Failure #3: 1st Centennial Bank, Redlands, CA

[Idealism]

Source: FDIC

1st Centennial Bank, Redlands, California, was closed today by the California Department of Financial Institutions, which then appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. 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.

...

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.

...

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.

Read more: http://www.fdic.gov/news/news/press/2009/pr09007.html

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Don't you just love weekend announcements from the financial sector?

[Tiggeroshii]

1. i didn't know redlands was that important

...learn something new everyday!

[CatholicEdHead]

2. Redlands is the center of CA

[Dem2theMax]

3. And ESRI is the center of Redlands.

That, and a lot of old houses. Really neat old houses.

[Left Coast2020]

4. Redlands is 90 min's east of L.A. near San Bernardino, but wait?

Here's reason number 57 to throw these bastards in jail. Related to bank story. OH, this will really piss you off. I recommend some breathing exercises before reading it. And better yet, make sure you're not around any sharp objects.

http://www.buzzflash.net/story.php?id=88505
(Follow headline link to story)

:argh:

[Tiggeroshii]

6. now it will be the mall...

:rofl:

[quakerboy]

5. Maybe this will sound ignorant, but I am curious

But what do you use to purchase assets that are made "mainly of cash"?

Also, what exactly does it mean that "First California" agreed to assume the insured deposits for a 5.29% premium? Maybe I am misinterpreting, but did they get paid more than the value of the deposits they are agreeing to hold for people? And if so, wouldn't it have been better for the FDIC to just pay the people with the deposits their money directly and let them choose what bank to move it to?