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Published: 7:37 pm Friday, Aug. 20, 2010

Federal regulators close Los Padres Bank

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By Associated Press

Regulators on Friday shut down four California banks, including Solvang-based Los Padres Bank.

The closures also included a large community bank based in Chicago, and banks in Florida and Virginia. The closures boosted to 118 the number of U.S. bank failures this year.

The Federal Deposit Insurance Corp. on Friday took over the California banks: Butte Community Bank, based in Chico; Pacific State Bank, based in Stockton; Los Padres Bank, in Solvang; and Sonoma Valley Bank, in Sonoma.

Los Padres Bank has branches in San Luis Obispo, Atascadero, Pismo Beach and Nipomo. Regulators last month issued a new enforcement order this week against the bank, a subsidiary of Harrington West Financial Group, calling on the savings association to strengthen its capital levels or be subject to further supervisory action.

The FDIC entered an agreement with San Diego-based Pacific Western Bank to assume all Los Padres Bank deposits, according to the FDIC.

Los Padres’ 14 branches are expected to open Monday as branches of Pacific Western, and depositors of Los Padres will automatically become depositors of Pacific Western, according to the FDIC.

The FDIC also seized Chicago-based ShoreBank; Imperial Savings and Loan Association of Martinsville, Va., and two Florida banks: Community National Bank at Bartow and Independent National Bank, in Ocala.

Customers with questions about the transaction can call the FDIC at 1-800-640-2751 between 9 a.m. and 6 p.m. on Saturday and noon and 6 p.m. on Sunday.

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