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120 bank closings in 2009 as five shuttered Nov. 6

$11.2 billion United Commercial Bank, CA and Four Others Closed Nov. 6, 2009; Total Closings Most Since 1992

On Friday, Nov. 6th, the FDIC and state banking authorities closed five failed banks, including $11.2 billion-asset United Commercial Bank, San Francisco, California and smaller institutions in Georgia, Michigan, Minnesota and Missouri. The move brought the total number of failed banks in 2009 to 120, the highest annual level since 1992.

United Commercial Bank, San Francisco, California, was closed by the California Department of Financial Institutions, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. The FDIC entered into a purchase and assumption agreement with East West Bank, Pasadena, California, to assume all of the deposits of United Commercial Bank. As of October 23, 2009, United Commercial Bank had total assets of $11.2 billion and total deposits of approximately $7.5 billion. East West Bank paid the FDIC a premium of 1.1 percent for the right to assume all of the deposits of United Commercial Bank. In addition to assuming all of the deposits of the failed bank, East West Bank agreed to purchase approximately $10.2 billion in assets of the failed bank. As part of the purchase and assumption agreement, the FDIC transferred to East West Bank all qualified financial contracts to which United Commercial Bank was a party and those contracts remain in full force and effect. The FDIC and East West Bank entered into a loss-share transaction on approximately $7.7 billion of United Commercial Bank's assets. East West Bank will share in the losses on the asset pools covered under the loss-share agreement. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $1.4 billion. 

United Security Bank, Sparta, Georgia, was closed by the Georgia Department of Banking and Finance, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. The FDIC entered into a purchase and assumption agreement with Ameris Bank, Moultrie, Georgia, to assume all of the deposits of United Security Bank. As of September 14, 2009, United Security Bank had total assets of $157 million and total deposits of approximately $150 million. Ameris Bank will pay the FDIC a premium of 0.36 percent to assume all of the deposits of United Security Bank. In addition to assuming all of the deposits of the failed bank, Ameris Bank agreed to purchase essentially all of the assets. The FDIC and Ameris Bank entered into a loss-share transaction on approximately $123 million of United Security Bank's assets. Ameris Bank will share in the losses on the asset pools covered under the loss-share agreement. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $58 million. 

Home Federal Savings Bank, Detroit, Michigan, was closed by the Office of Thrift Supervision, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. The FDIC entered into a purchase and assumption agreement with Liberty Bank and Trust Company, New Orleans, Louisiana, to assume all of the deposits of Home Federal Savings Bank. As of September 24, 2009, Home Federal Savings Bank had total assets of $14.9 million and total deposits of approximately $12.8 million. Liberty Bank and Trust Company did not pay a premium to assume all of the deposits of Home Federal Savings Bank. In addition to assuming all of the deposits of the failed bank, Liberty Bank and Trust Company agreed to purchase essentially all of the assets. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $5.4 million.

Prosperan Bank, Oakdale, Minnesota, was closed by the Minnesota Department of Commerce, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. The FDIC entered into a purchase and assumption agreement with Alerus Financial, National Association, Grand Forks, North Dakota, to assume all of the deposits of Prosperan Bank. As of August 31, 2009, Prosperan Bank had total assets of $199.5 million and total deposits of approximately $175.6 million. Alerus Financial, N.A. will pay the FDIC a premium of 1.02 percent to assume all of the deposits of Prosperan Bank. In addition to assuming all of the deposits of the failed bank, Alerus Financial, N.A. agreed to purchase approximately $173.9 million of the failed bank's assets. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $60.1 million.

Gateway Bank of St. Louis, St. Louis, Missouri, was closed by the Missouri Division of Finance, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. The FDIC entered into a purchase and assumption agreement with Central Bank of Kansas City, to assume all of the deposits of Gateway Bank of St. Louis. As of September 25, 2009, Gateway Bank of St. Louis had total assets of $27.7 million and total deposits of approximately $27.9 million. Central Bank of Kansas City did not pay the FDIC a premium for the deposits of Gateway Bank of St. Louis. In addition to assuming all of the deposits of the failed bank, Central Bank of Kansas City agreed to purchase essentially all of the assets. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $9.2 million.
 

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