Regulators seize Los Padres Bank
August 21, 2010
Regulators on Friday shut down Solvang-based Los Padres Bank as part of what is being dubbed “bank closure Friday.”
The 14 branches of Los Padres Bank, which includes four in San Luis Obispo County, will reopen on Monday as branches of Pacific Western Bank. The San Diego based bank agreed to assume Los Padres Bank’s assets of $870 million.
Under the terms of the agreement with Pacific Western Bank, the Federal Deposit Insurance Corporation (FDIC) will absorb 80 percent of losses and share in 80 percent of loss recoveries. The FDIC estimates the failure of Los Padres Bank will cost their insurance fund $8.7 million.
The FDIC said they will continue to insure deposits, “so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage.”
“This evening and over the weekend, depositors of Los Padres Bank can access their money by writing checks or using ATM or debit cards,” the FDIC said in Friday’s press release. “Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.”
The FDIC also shut down seven other banks late Friday, bringing the total number of U.S. bank failures this year to 118. The FDIC estimates the eight banks seized Friday will cost the deposit insurance fund $479.4 million.
The eight failed banks had a total of 74 branches.
The other banks closed Friday:
• Butte Community Bank in Chico, Calif.
• Pacific State Bank in Stockton, Calif.
• Sonoma Valley Bank in Sonoma, Calif.
• ShoreBank in Chicago, Ill.
• Community National Bank in Bartow, Fla.
• Independent National Bank in Ocala, Fla.
• Imperial Savings and Loan Association in Martinsville, Va.