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99th Bank Failure of 2009 - San Joaquin Bank in California


For a while it was looking like we may have two Fridays in a row without a bank failure, but there was one late west coast closure today. This brings the 2009 number of bank failures to 99. It looks like it'll be at least another week before we hit the 100 milestone.

San Joaquin Bank was closed by California regulators, and the FDIC arranged for Citizens Business Bank to acquire all deposits. In addition, Citizens Business Bank agreed to purchase essentially all of the assets. The cost to the FDIC Deposit Insurance Fund (DIF) was $103 million which is less than the cost of similar sized closures. For example, Warren Bank in Michigan which was a tad smaller than San Joaquin Bank failed two weeks ago and it cost the DIF an estimated $275 million.

Citizens Business Bank hasn't decided on interest rates of San Joaquin Bank CDs. It has been very common this year for the acquiring banks to cut rates on existing CDs or close existing CDs. The worst example this year has been at MB Financial which assumed all deposits when Corus Bank failed (see post).

Summary of today's bank failure:

99th Bank Failure of 2009 (10th in CA)
  • FDIC Press Release
  • Closed Bank: San Joaquin Bank, Bakersfield, CA
  • Size: 5 branches, $775 million in assets, $631 million in deposits
  • Possible Uninsured Deposits: All deposits transferred excluding some brokered deposits
  • Acquiring Bank: Citizens Business Bank, Ontario, CA
  • Rate Changes: Citizens Business Bank will review rates
  • Estimated Cost to Deposit Insurance Fund: $103 million
  • Financial Ratings: 1 star (lowest) at Bankrate.com, 0 star (lowest) at BauerFinancial
Bankrate's and BauerFinancial's ratings are based on 6/30/09 data.


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