State regulators close three banks

FirstBank Financial Services of Georgia and Alliance Bank and County Bank of California become latest victims of banking crisis; nine banks have failed in 2009.

EMAIL  |   PRINT  |   SHARE  |   RSS
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all RSS FEEDS (close)
By Kenneth Musante, staff writer

NEW YORK ( -- State regulators shuttered three banks Friday evening, bringing the total number of bank failures this year to nine.

Deposits at FirstBank Financial Services based in McDonough, Ga. will be taken over by Regions Bank (RF, Fortune 500), based in Birmingham, Ala., according to the Federal Deposit Insurance Corporation.

FirstBank's four branches will reopen on Monday as Regions Bank branches, the agency said.

FirstBank held assets worth about $337 million, and held deposits worth about $279 million at the end of December, the Federal Deposit Insurance Corporation said. Regions Bank has agreed to purchase about $17 million of FirstBank's assets.

Meanwhile, deposits at Alliance Bank out of Culver City, Calif. will be assumed by California Bank & Trust from San Diego.

Alliance Bank held assets totaling $1.14 billion, and deposits of $951 million, the FDIC said. California Bank & Trust agreed to purchase $1.12 billion of Alliance's assets at a discount of $9.9 million.

California Bank & Trust also agreed to share some of the asset losses with the FDIC, the agency said.

Alliance Bank's five offices will reopen Monday as branches of California Bank & Trust.

Finally, County Bank of Merced, Calif. was closed late Friday. The FDIC said that Westamerica Bank of San Rafael, Calif. will assume all of the deposits of County Bank.

County Bank had total assets of approximately $1.7 billion and total deposits of $1.3 billion. Westamerica Bank (WABC), in addition to assuming the deposits, agreed to purchase all of County Bank's assets.

The FDIC said County Bank's 39 offices would reopen as branches of Westamerica. Branches with Saturday hours will reopen Saturday while the remaining branches will reopen Monday.

Customers who banked with FirstBank, Alliance Bank or County Bank will automatically become customers of the new deposit holders, and will retain their account protection under the FDIC, which insures single accounts up to $250,000, and joint accounts up to $500,000, the government agency said.

Over the weekend, those customers will be able to use checks, ATMs and debit cards as normal. Customers who have taken out loans from a failed bank should continue to make regular payments, the FDIC said.

Altogether, the three bank failures will cost the FDIC about $452 million.

The unfolding financial crisis continues to take a toll on banks. If banks continue to fail at a rate of at least one per week, on average, then 2009 could see twice as many failures as in 2008. Last year, 25 banks were closed nationwide, which was the highest annual total since 1993, when 42 banks went under.

Economists expect the number of failed banks to continue rising this year as the financial crisis plays out and the economic outlook remains dark. To top of page

They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
17 cool gadgets that tease the future Smart telescopes, surveillance for dogs, an electric roadster and more from CES 2018. More
These 12 airplane beds let you really sleep on a flight For the price of a premium class ticket, you may just get a space that's comfortable, private, and quiet enough to ensure a good rest. More
CES 2018 kicks off with oddball gadgets The biggest tech show of the year opened with a collection of quirky gadgets. More