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14 April 2024

Regulators close three more US banks

Members of the Federal Deposit Insurance Corp enter the Suburban Federal Savings Bank in Crofton, Maryland as they officially take over the establishment. FDIC has also closed banks in Georgia and California as the country’s banking system struggles with the crisis. (AP) 

By Reuters
Regulators closed banks on Friday in Georgia and California, bringing the total of US bank failures to nine this year.

The Federal Deposit Insurance Corp said County Bank of Merced, California, was closed by the California Department of Financial Institutions, and the FDIC was appointed as a receiver.

County Bank, which operated 39 offices, had $1.7 billion (Dh6.3 billion) in assets and $1.3 billion in deposits, according to regulators. Westamerica Bank of San Rafael, California, will assume all of the deposits of the failed bank.

The FDIC said in a release the cost to the Deposit Insurance Fund would be $135 million.

The FDIC also said it became a receiver of Culver City, California-based Alliance Bank and entered into an agreement with California Bank & Trust, a subsidiary of Zions Bancorp, to assume all the deposits.

Alliance Bank was closed by the California Department of Financial Institutions. The bank had $1.14 billion in assets and $951 million in deposits. The cost to the Deposit Insurance Fund will be $206 million, the FDIC estimated.

Regulators said on Friday a third firm, FirstBank Financial Services, had failed.

All deposits of the McDonough, Georgia, bank will be assumed by Regions Bank of Birmingham, Alabama, said the FDIC, which took receivership of FirstBank.

Regulators said FirstBank Financial Services had assets of about $337 million and $279 million in deposits at the end of 2008. The estimated cost to the Deposit Insurance Fund will be $111 million.

In 2008, 25 banks were seized by officials, up from only three in 2007.