Five more banks fail - 120 for the year

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NEW YORK (CNNMoney.com) -- Five banks failed late Friday, bringing the 2009 tally to 120.

The biggest to fall was United Commercial Bank of San Francisco, which had 63 U.S. branches as well as operations in Hong Kong and Shanghai. The bank held deposits totaling $7.5 billion.

East West Bank of Pasadena, Calif., agreed to assume all of United Commercial's domestic branches, as well as its international subsidiaries.

United Security Bank of Sparta, Ga., closed its doors for the last time on Friday. Moultrie, Ga.-based Ameris Bank will assume control of all United Security's deposits.

Home Federal Savings Bank of Detroit also failed late friday. New Orleans-based Liberty Bank and Trust Co. will assume control of its deposits.

Prosperan Bank of Oakdale, Minn., failed and will be taken over by Grand Forks, N.D.-based Alerus Financial.

Gateway Bank of St. Louis, Mo., also failed. Central Bank of Kansas City will take over its deposits.

Customers of the failed banks are protected, however. The FDIC., which has insured bank deposits since the Great Depression, currently covers customer accounts up to $250,000.

Customers can access their money over the weekend by writing checks or using ATMs or debit cards. Checks will continue to be processed, and borrowers should make mortgage and loan payments as usual.

What happens to the banks. United Commercial's failure will cost the FDIC's Deposit Insurance Fund an estimated $1.4 billion. East West Bank paid the FDIC a premium of 1.1% for the right to assume United Commercial's deposits, and the two organizations agreed to share losses on around $7.7 billion of the failed bank's assets.

An average of 11 banks have failed per month this year, and the federal coffer is thinning under the massive strain. The fund now stands below $10 billion, down significantly from $45 billion a year ago.

When the FDIC factors in expected closures, the agency says the fund is in the red and will likely remain there through 2012. Bank failure costs are expected to total $100 billion over the next four years.

So far 2009 has seen more than four times the number that were closed in 2008. It's the highest total since 1992, when 181 banks failed.

Ameris Bank will pay the FDIC a premium of 0.36% to take control of American United's $150 million in deposits.

United Security had $157 million in assets, and the FDIC and Ameris entered into a loss-share transaction on $123 million of those assets. The agreement means Ameris will share in the losses on the assets covered.

The failure is expected to cost the Deposit Insurance Fund an estimated $58 million. The two branches of United Security will reopen Saturday as branches of Ameris.

Liberty Bank and Trust will assume Home Federal Savings Bank's $14.9 million in assets and $12.8 million in deposits. The failure cost the FDIC fund $5.4 million. The two branches of Home Federal will reopen Saturday as branches of Liberty.

Alerus Financial will pay the FDIC a premium of 1.02% to take control of Prosperan's $175.6 million in deposits. Prosperan had $199.5 million in assets, and the FDIC and Alerus entered into a loss-share transaction on $173.9 million of those assets.

The failure will cost the FDIC $60.1 million. The three branches of Prosperan will reopen Saturday as branches of Alerus.

Central Bank will assume Gateway Bank's $27.7 million in assets and $27.9 million in deposits. The failure cost the FDIC fund $9.2 million. The single branch of Gateway will reopen Saturday as a branch of Central.