Rabobank buys two failed banks
Dutch banking giant Rabobank scooped up failed Chico-based Butte Community Bank and Stockton-based Pacific State Bank on Aug. 20, as the federal government swept through California and shuttered four banks.
Butte Community and Pacific State operated a total of 23 branches. They were acquired through a purchase and assumption agreement with the FDIC, through which Rabobank assumed all deposits and essentially all of the assets of the two institutions.
Rabobank, with 42 tri-county branches, is the second-largest national banking presence in the region.
The bank acquired Butte Community Bank, with assets of $498.8 million and deposits of $471.3 million, for a 4.05 percent premium. Pacific State Bank, with assets of $312.1 million and deposits of $278.8 million, was acquired for no premium.
The FDIC and Rabobank also entered into a loss-share deal on $425.4 million of Butte Community Bank’s assets and $249.7 million of Pacific State Bank’s assets. Rabobank will share in the losses on the asset pools covered under the agreement. The FDIC estimated that the cost to the Deposit Insurance Fund will be $50 million for both banks.
The FDIC descended on the state on Friday, closing four California banks, including Solvang-based Los Padres Bank, which was acquired by San Diego-based Pacific Western Bank.
