|A California bank was the third government-insured institution to fail this year.
The California Department of Financial Institutions Friday shut down 1st Centennial Bank of Redlands, Calif., an announcement said. The Federal Deposit Insurance Corporation was appointed receiver.
California regulators cited inadequate capital in their decision to close the bank.
Insured deposits of $664 million were assumed for a 5.29 percent premium by First California Bank in Westlake Village, Calif. Six 1st Centennial branches open today under the First California brand.
Around $13 million in deposits were uninsured, while another $362 million in brokered deposits were not part of transaction with First California.
Approximately $293 million of 1st Centennial's $803 million in assets as of Jan. 9 are being acquired by First California. As of Sept. 30, 2008, the failed institution held $216 million in construction and land development loans, $84 million in commercial real estate loans and $16 million in residential loans.
The FDIC expects its deposit insurance fund to take a $227 million hit.
1st Centennial had 139 employees, according to FDIC data.
"The Department of Financial Institutions has been closely monitoring the bank and had ordered it to increase its capital reserves to a safe and sound level," the bank regulator stated in a press release. "But efforts by the bank to do so were unsuccessful."