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Californias First Centennial Bank Shut by Regulator (Update1)

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Joanne98 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jan-24-09 01:21 PM
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By Margaret Chadbourn and Ari Levy

Jan. 24 (Bloomberg) -- First Centennial Bank of Redlands, California, was seized by a state regulator, the third U.S. bank to fail this year, as the recession deepens and the slump in the housing industry sends home foreclosures to records.

First Centennial, with $803.3 million in assets and $676.9 million in deposits, was shut by the California Department of Financial Institutions and the Federal Deposit Insurance Corp. was named receiver. First California Bank, based in Westlake Village, will assume deposits and open the failed banks 6 offices near Los Angeles and San Diego on Jan. 26 as branches, the FDIC said.

Depositors of the failed bank will automatically become depositors of First California, the FDIC said in an e-mailed statement. There is no need for customers to change their banking relationship to retain their deposit insurance coverage.

Regulators closed 25 banks last year, the most since 1993, draining money from the FDIC deposit insurance fund, which had $34.6 billion as of Sept. 30. National Bank of Commerce in Berkeley, Illinois, and Bank of Clark County in Vancouver, Washington, were shuttered by regulators on Jan. 16.

First California will buy $293 million in assets and pay a premium of 5.3 percent to assume the failed banks insured deposits, the FDIC said. The cost to the deposit insurance fund, supported by fees on insured banks, will be an estimated $227 million, the agency said. First Centennial had about $12.8 million in deposits that exceeded insured limits, the FDIC said.
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