FDIC Seizes 1st Centenial in Redlands, CA, 3rd 2009 Bank Failure

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.

The six branches of 1st Centennial will reopen on Monday as branches of First California Bank. Depositors of the failed bank will automatically become depositors of First California. 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.

Over the weekend, customers of 1st Centennial 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 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. This amount is an estimate that is likely to change once the FDIC obtains additional information from these customers.

1st Centennial also had approximately $362 million in brokered deposits that are not part of today’s transaction. The FDIC will pay the brokers for the amount of their insured funds. Customers who have placed money with these brokers should contact them directly for more information.

Customers with accounts in excess of $250,000 should contact the FDIC toll-free at 1-800-822-1918 to set up an appointment to discuss their deposits. This phone number will be operational this evening until 9:00 p.m., PST; on Saturday from 9:00 a.m. to 6:00 p.m., PST; on Sunday from 12:00 p.m. to 6:00 p.m., PST; and thereafter from 8:00 a.m. to 8:00 p.m., PST. Customers who would like more information on today’s transaction should visit the FDIC’s Web site at http://www.fdic.gov/bank/individual/failed/centennial.html.

Beginning Monday, depositors of 1st Centennial with more than $250,000 at the bank may visit the FDIC’s Web page “Is My Account Fully Insured?” at http://www2.fdic.gov/dip/Index.asp to determine their insurance coverage.

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.