On Friday, the California Department of Financial Institutions closed Affinity Bank, headquartered in Ventura California, and the FDIC was named as receiver. As receiver, the FDIC entered into a purchase and assumption agreement with Pacific Western Bank, headquartered in San Diego, California, to assume all of the deposits of Affinity Bank.

As of June 30, 2009, Affinity Bank had total deposits of $1 billion and total assets of $922 million. In addition to assuming all of the deposits, Pacific Western Bank also agreed to purchase nearly all of the assets of the failed bank. The FDIC and Pacific Western entered into a loss-share transaction on approximately $934 million of Affinity Bank’s assets.

The FDIC estimates that the cost to the Deposit Insurance Fund will be $254 million. Affinity Bank is the 84th bank to fail in the nation this year and the 9th bank in California.