The sign to Butte Community Bank will soon come down, in its place Rabobank. "Regulators have bee working with Butte Community Bank for quite sometime trying to help them get back in good financial standing" said Tricia Wynegar, a Senior Ombussman Specialist for FDIC.
Unfortunately for Butte Community Bank, that didn't happen. Friday evening the Federal Deposit Insurance Corporation seized control of the Chico based bank after it was closed by the California Department of Financial Institutions. "The FDIC was named receiver and subsequently sold Butte Community Bank to Rabobank" Wynegar said.
The bank had been in hot water with its assets which totaled at 498 million dollars with deposits totaling 471 million. The bank's failure will cost the deposit insurance fund more than 17 million dollars. Butte Community was heavily invested in commercial real estate which depreciated severely. "The economic downturn has affected the value of that property" Wynegar explained.
But the FDIC and the banks new owner "Rabobank", which has its main headquarters in Roseville, assure all customers it's business as usual, and that most of all, their money is safe and sound. "Deposits are safe, Rabobank purchased all of the deposits of Butte Community Bank and all of the assets" Wynegar said.
Customers are also told they may continue using the same checks, atm and credit cards. Online banking, deposits and loans will also remain the same, however some customers are still weary. "It think it's definitely something that I'm going to have to reconsider, I don't think that it's something to be taken lightly. I think I really need to reconsider my banking options" said Butte Community Bank Customer Sarah Matthews.
Rabobank will now assume ownership of all 14 branches of Butte Community Bank from Yuba City to Redding. The FDIC will continue with further review on all all reasons that led to Butte Community Banks failure.