Imperial Capital Bank's nine branches will reopen as branches of City National Bank today following the California Department of Financial Institutions' decision to close La Jolla-based Imperial because of inadequate capital reserves.
The Federal Deposit Insurance Corp. was appointed as receiver and entered into a purchase and assumption agreement with Los Angeles-based City National Bank to assume Imperial Capital's assets, said Greg Hernandez of the Federal Deposit Insurance Corp.
"Imperial Capital Bank is a very good fit for City National, given that eight of its nine locations are in communities we serve," said City National Corp. Chief Executive Officer Russell Goldsmith.
"When we complete the integration, Imperial Capital's clients will benefit from the much greater capabilities and services of City National and the clients of City National will enjoy the added convenience of an expanded branch network.
"In addition, we're pleased to contribute to the increased stability of the banking system with an acquisition that will enable City National to become a somewhat larger and more efficient and profitable company."
Customers should continue to use their existing branch until they receive notice from City National that it has completed systems changes to allow other City National branches to process their accounts, Hernandez said.
Imperial Capital depositors will automatically become depositors of City National and continue to be insured by the FDIC, Hernandez said. Checks drawn on Imperial Capital accounts will continue to be processed, and mortgage borrowers should continue to make payments as usual, Hernandez said.
Imperial Capital had about $4 billion in assets and $2.8 billion in deposits as of Sept. 30, Hernandez said.
Department of Financial Institutions officials had closely monitored Imperial Capital and ordered it to increase its capital reserves to a "safe and sound level," but its efforts were unsuccessful, prompting Friday's closure, said the department's Alana Golden.
City National paid the FDIC a .24 percent premium to assume Imperial Capital deposits and agreed to purchase $3.3 billion of its assets, Hernandez said.
Hernandez estimated that Imperial Capital's failure will cost the FDIC's Deposit Insurance Fund $619.2 million.
Imperial Capital, which came into being in 1974, was the 139th FDIC-insured institution to fail this year and the 16th in California, Hernandez said. Those totals grew by one later on Friday when Santa Monica-based First Federal Bank of California was closed.
Customers with questions about the closure can call the FDIC at (800) 613-0523 from 8 a.m. to 8 p.m. weekdays. The toll-free number will not be in operation from 3 p.m. Thursday through 8 a.m. Dec. 28 because of the holiday.
Information is available online at the FDIC Web site.
