Western Commercial Bank Closes, Reopens Under New Name

Western Commercial Bank in Woodland Hills was closed by the California Department of Financial Institutions Nov. 5, after nearly a year of struggling with poor quality loans and inadequate capital. State and federal regulators had warned the one-branch small business lender last fall to take actions to resolve its “unsafe or unsound banking practices”. A final warning was delivered in August and the bank was asked to find an investor or buyer to rescue the bank. In June, founder and CEO Carl Raggio’s surprise resignation left many in the business community speculating about the financial future of the bank, which first opened in 2006. The Federal Deposit Insurance Corp. issued a statement announcing First California Bank in Westlake Village would take over the failed bank’s deposits and assets and the branch would reopen on Nov. 8 as a branch of First California Bank. As of Sept. 30, 2010, Western Commercial Bank had approximately $98.6 million in total assets and $101.1 million in total deposits. The FDIC said it would share the losses on about $84 million of loans. The failed bank will cost the Deposit Insurance Fund and estimated $25.2 million, according to the FDIC. Western Commercial Bank is the 141st FDIC-insured institution to fail in the nation this year, and the eleventh in California. Depositors of Western Commercial Bank will automatically become depositors of First California Bank. The FDIC said 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 up to applicable limits. Customers of Western Commercial Bank should continue to use their existing branch until they receive notice from First California Bank that it has completed systems changes to allow other First California Bank branches to process their accounts as well.