Thirty-three banks across the country that received federal bailout money didn't pay the government a dividend this summer — and one-third of them are based in California, federal data show.
Two of the 11 California banks that didn't pay dividends — which can indicate they are short on cash — were seized by state and federal regulators in the past two weeks. The failures left taxpayers with $302 million in losses under the government bailout, known as the Troubled Asset Relief Program.
Now eight other California banks that received bailout cash and aren't paying dividends are displaying "danger signals," according to a finance expert tracking the program's progress, suggesting more trouble may loom for state banks before the recession ends.
The latest casualty was Pacific Coast National Bank of San Clemente. A fledgling two-branch lender whose Web site featured links to ocean surf reports, it received $4.1 million in bailout money in January.
Last Friday, Pacific Coast was seized and closed by the Office of the Comptroller of the Currency, which blamed its demise on "unsafe and unsound practices."
The Federal Deposit Insurance Corp. was named receiver of Pacific Coast and it immediately arranged a deal to transfer its assets and $130.9 million in deposits to Sunwest Bank of Tustin.
To read the complete article, visit www.sacbee.com.