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Federal regulators seize San Luis Trust Bank

February 18, 2011

Agents set up tables after seizing the bank

By LISA RIZZO and KAREN VELIE

Federal regulators shut down San Luis Trust Bank (SLTB) in San Luis Obispo Friday because the bank was critically undercapitalized, according to the Federal Deposit Insurance Corp. (FDIC).

At 5:55p.m. Friday, just five minutes before the bank was scheduled to close for the day, the Office of Thrift Supervision (OTS) declared SLTB a failed institution.

CalCoastNews watched as dozens of federal agents moved in to take possession of the bank, begin counting cash, and securing safety depositories and hard drives.

Some 60 federal agents are expected to work until 10 p.m. to 11 p.m. tonight. Throughout the weekend they will put in 10 to 12 hour days, said FDIC spokesperson Barbara Brunson.

The bank, which had only one branch, located at 1001 Marsh St., will reopen on Tuesday as the 19th branch of First California Bank out of Westlake Village. The FDIC said the San Luis Trust’s sole branch in the reorganization will continue to accept deposits and perform other bank services.

Approximately two months ago bank regulators posted in a data room that SLTB was underfunded and banks interested in taking over a portion of the bank’s assets and debts needed to have their bids in by Feb. 11.

“We were notified Monday we were the winning bidder,” said C. G. Kum, First California Bank president and CEO.

An FDIC agent speaks to bank employees

According to Kum the assumption of SLTB, brings First California Bank’s asset portfolio to $1.9 billion. He was unsure how many of the bank’s current 30 plus employees would be retained by First California Bank.

“We will keep as many as we can but we won’t be able to keep them all,” Kum said.

Federal agents have a matter of days to reconstruct the bank’s entire balance sheet from all the paperwork and documents they can find before turning it over to First California Bank.

The FDIC and First California Bank entered into a loss-share transaction on $241.7 million of SLTB’s assets.

As of Dec. 31, SLTB had approximately $332.6 million in total assets and $272.2 million in total deposits.

The FDIC estimates that the cost to the Deposit Insurance Fund will be $96.1 million.
The seizure follows an OTS deadline that required SLTB to be recapitalized by Feb. 15 through a merger, an acquisition or an investor.

In November, the OTS ordered the bank to submit a restoration plan detailing how it would become at least “adequately capitalized.”

On Feb. 9, the OTS issued a “prompt corrective action directive” and denied SLTB’s restoration plan.

Agents stacked suitcases and umbrellas near the bank’s entrance.

In the directive, the OTS warned the institution that it had until Feb. 11, to submit a plan on how it would be recapitalized by Tuesday, Feb. 15.

Since SLTB’s inception in 1999, six formal enforcement actions have been filed against the bank. Based in Washington D.C., the OTS is a bureau of the U.S. Department of Treasury and is the primary regulator of federal saving institutions, including SLTB.

In 2001, following a lengthy examination, the OTS determined SLTB had engaged in unsafe and unsound acts and practices. The OTS and the bank signed a 15-page agreement in November, 2001, attempting to bring the struggling institution back into compliance.

Until the transfer is complete, former SLTB customers can access their money by writing checks and using ATM or debit cards. Checks drawn on the bank will continue to be processed. Federal regulators suggest loan customers continue to make their payments as usual.

Accounts with a balance of $250,000 or less are fully insured by the FDIC.


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Women are tremendously dangerous and disruptive in any workplace where men are tasked with maintaining the very fabric of our society – Banking, law enforcement, the judiciary, and all matters financial, for instance. Simply put, they engender chaos and distorted judgment in the men who so ably serve us, the commoners.


Of course, the women who were allowed into the hallowed towers of banking before the crisis weren’t typically permitted to take big financial risks. As a rule they remained in the background, as “helpmates.” But their presence clearly distorted the judgment of their superior male bond traders. Although the precise mechanics of their influence remains unclear, it is believed they may have compelled the male risk takers to “show off for the ladies,” for instance, or perhaps they merely asked annoying questions and undermined the risk takers’ focus and confidence.


At any rate, one sure sign of the importance of women in the financial crisis is the market’s subsequent response: to purge women from senior roles. So that’s sorted then – banking’s gender problem is, for the moment, of merely academic interest.


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Then perhaps we should observe the top network in the world and NBC’s top international reporter, Andrea Mitchell-Greenspan’s effect on Alan. Alan, the lying, theiveing king of BS. I can still see him addressing congress rampaging through the dictionary picking the most obcsure and longest words available, firing them at the perplexed congress people who tried their hardest to look like they knew what the hell he was talking about but afraid to ask for fear of looking stupid, except for Ron Paul. Of course he was just babbling as we now know. This insect KNOWINGLY ran the American economy into an oak tree making hoards of money for ONLY the top of the world’s financial heap then printing up and depositing a trillion more into the same criminals’ accounts. And what about Blankfein, the head of Goldman-Sachs roll? Until we realize who and what these bottom of the barrel theives really are and their roll as the new world’s true rulers through banking we are doomed to continue to be enslaved by them. The World bank, IMF, Wall st. and other bankster gangs now have the world in their grasp and not a peep from the corporate media and that’s because they are part and parcel of the scam called banking.

Print money out of thin air, also called counterfeiting, “lend it out” thereby capturing ownership of assets then being repaid with real dollars with interest yet from the folks who worked and actually laundered their funny money for them. What a obvious “elephant in the room” scam so big you can’t see the forest for the trees.

Tomorrow morning when you get up early, leave your kids, risk your butt on the road, work yourself to the bone, think about who your working for and where your money is going. It’s mostly going toward interest on your inflated priced home through easily obtained mortgage, credit cards, car loans by half or more. You are these monster’s money launderers. They start wars (Doug Feith, Paul Wolfowitz) , finance and direct arms (Perle, also known as the Prince of Darkness) create false news and false enemies (the great diversion from the truth, the terrorist threat by the media moguls too numerous to mention who are really the world’s hypnotists).

Booty Ju Ju, I’m sure these swine’s wives and secretaries through femine gile have some effect on them. If they make vast fortunes that translates into security and general shopping joy for the ladies, but I gotta think it’s not only in their jeans but in their genes to steal and theive their way through society.

C’mon folks, wake up, rub your eyes and turn the lights on these cockroaches.


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I would like to know who started this bank in the first place. Until I read an article a couple of years ago in the Tribune about 250 investors pooling their personal money to start a new bank in SLO, I had no idea how banks were created. How to obtain a list of original investors and starting balance sheet for any bank? How to obtain their originating documents, bylaws, charter, etc?


As for me, I’m starting with “math for first graders” at math.com… In five years, (if I’m not dead yet and the country has managed to pull itself back from the brink of starting a third world war,) I hope to be literate enough to pass a statistics class.


With the stats background, I hope to prove numerically and empiracally that San Luis Obispo Superior Court’s hiring policies are so mysogynistic they would rather hire gay men to satisfy the state’s “equal employment opportunity” mandates than hire more women to fill supervisorial and judicial roles. In this way, they satisfy the public policy requirement to give more job opportunities to “minorities,” while still blocking eligible women from being hired as “juidical officers.”


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