All four Security Pacific Bank(SPB) branches in Los Angeles re-opened on Monday as branches of Pacific Western Bank after the SPB was taken over by the Federal Deposit Insurance Corp. (FDIC).
The California Department of Financial Institutions (DFI) closed the SPB last Friday for "perilous under capitalization."
The FDIC then announced it had entered into a purchase and assumption agreement with Pacific Western Bank to assume all deposits of Security Pacific.
Customers of the failed bank will automatically become depositors of Pacific Western, and their money will continue to be insured by the FDIC.
"All branches of Security Pacific Bank will reopen on Monday with no disruption in service," the DFI said in a statement following the closure.
Security Pacific is the 19th American bank to fail this year, the third in California. The last bank to be closed in the state was Newport Beach-based First Heritage Bank, National Association, on July 25, according to the FDIC.
As of Oct. 31, Security Pacific had total assets of about 510 million dollars and total deposits of about 440 million dollars, according to the DFI, which supervises more than 700 financial institutions in California.
"The DFI has been closely monitoring the bank and had ordered it to increase its capital reserves to a safe and sound level. But efforts by the bank to do so were unsuccessful," the DFI said.
Pacific Western agreed to assume all of Security Pacific's deposits for a 2 percent premium, and will also purchase about 51.8 million dollars of assets, according to the FDIC, which will retain the remaining assets for later disposition.
Source:Xinhua
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