Sonoma Valley Bank closed by the federal regulators
Sonoma Valley Bank was closed on Friday, August 20 by the California Department of Financial Institutions, appointed by the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Westamerica Bank, San Rafael, California, to assume all of the deposits of Sonoma Valley Bank.
The three branches of Sonoma Valley Bank will reopen on Saturday as branches of Westamerica Bank. Depositors of Sonoma Valley Bank will automatically become depositors of Westamerica Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage. Customers of Sonoma Valley Bank should continue to use their existing branch until they receive notice from Westamerica Bank that it has completed systems changes to allow other Westamerica Bank branches to process their accounts as well.
Over the weekend, depositors of Sonoma Valley Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.
As of June 30, 2010, Sonoma Valley Bank had approximately $337.1 million in total assets and $255.5 million in total deposits. Westamerica Bank will pay the FDIC a premium of 2.0 percent to assume all of the deposits of Sonoma Valley Bank. In addition to assuming all of the deposits of the failed bank, Westamerica Bank agreed to purchase essentially all of the assets.
Customers who have questions about today’s transaction can call the FDIC toll-free at 1-800-913-3062. The phone number will be operational this evening until 9 p.m., Pacific Daylight Time (PDT); on Saturday from 9:00 a.m. to 6:00 p.m., PDT; on Sunday from noon to 6:00 p.m., PDT; and thereafter from 8:00 a.m. to 8:00 p.m., PDT. Interested parties also can visit the FDIC’s Web site at www.fdic.gov/bank/individual/failed/sonoma.html.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $10.1 million. Compared to other alternatives, Westamerica Bank’s acquisition was the least costly resolution for the FDIC’s DIF. Sonoma Valley Bank is the 118th FDIC-insured institution to fail in the nation this year, and the tenth in California. The last FDIC-insured institution closed in the state was Los Padres Bank, Solvang, earlier today.
