This city will miss San Joaquin Bank
San Joaquin Bank deserved to be part of Kern County's economic recovery. The bank was a vital community partner during the milder booms and busts of the past three decades, helping to fuel the gradual (and ongoing) rejuvenation of Bakersfield's once-moribund downtown district in particular.
The bank was also an important partner in many charitable and arts-related causes through the years, going well beyond what we might have expected of such an institution.
But, even amid tentative signs that the recession of 2008-09 is easing, the Bakersfield-based bank was closed Friday by state and federal regulators, its $775 million in assets and five branches acquired in a government-brokered deal by Citizens Business Bank of Ontario.
San Joaquin Bank's failure is especially disappointing in light of suggestions that it need not have happened. The bank was said to have secured the $27 million in capital that regulators demanded it nail down in order the stave off closure, only to face the axe anyway.
But these are difficult times, with the FDIC closing as many as five banks a week for much of 2009. San Joaquin became the 99th bank to fail this year -- a failure that is expected to cost the FDIC's increasingly battered insurance fund approximately $103 million.
However, San Joaquin's closure represents just the fourth bank failure this month, an indication that things may be improving. The FDIC reported 24 failures in July, followed by 15 in August and 11 in September.
The slowing rate of bank failures, while encouraging, makes the closing of San Joaquin Bank all the more confounding.
We won't second-guess the FDIC, which has a daunting responsibility. We'll simple lament the passing of an honorable local institution.
