Customers of the failed institution were insured by the FDIC for up to 100-thousand dollars. Anything over that amount, customers get 50-cents to the dollar.
James Rivas of Fowler was especially worried because his home mortgage was financed by Indy Mac. Rivas said "We're just waiting for a notice in the mail if we're still gonna send our mortgage there or if they're gonna sell us off to another bank. What's the biggest fear right now? Going to another bank and giving us a higher interest rate."
Premier Valley Bank CEO Michael Martinez calls Indy Mac an industry study in how not to conduct business. Martinez said "You see a bank like Indy Mac. We hear the phrase 'too big to fail.' Well they failed. That's a case of one organization that put all its eggs into one basket with high concentration on risky mortgage type lending. As community banks we don't do that."
Premier Valley Bank is locally-owned with 480-million in assets. But growing problems among lending institutions have customers at many local banks asking whether their money is safe.
Martinez said "Thankfully we have a very conservative credit culture. Most community banks do and we're able to avoid that sort of trouble."
Still, Martinez says we are in for a very challenging cycle over the next 12-18 months.
James Rivas knows that all too well. Like so many others, he never thought a bank like Indy Mac could fail. Rivas said "Yeah it surprised us because they were one of the biggest banks out there. That's what our mortgage banker told us."
Fresno County will invest two-million dollar in one-year CD deposits with both Premier Valley Bank and Central Valley Community Bank. The move was made to help stimulate the local economy.
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