Number of closed banks in US rises to 120 in 2009

The Federal Deposit Insurance Corp (FDIC), the US financial sector regulator, on Friday announced the closure of five more banks, taking the current year tally of shut banks in the US to 120.

FDIC said it took over United Commercial Bank in San Francisco and has sold it to East West Bancorp Inc, the parent company of East West Bank based in Pasadena, California. United Commercial Bank had $11.2 billion in assets and $7.5 billion in deposits.

The FDIC also seized United Security Bank, based in Sparta, Ga and handed it over to Ameris Bank, based in Moultrie, Ga, which would assume its assets and deposits. United Security had assets worth $157 million and deposits totalling $150 million.

Home Federal Savings Bank in Detroit has been handed over to Liberty Bank and Trust Co, based in New Orleans, which will buy the assets and deposits of Home Federal Savings worth $14.9 million and $12.8 million, respectively.

FDI seized Prosperan Bank, based in Oakdale, Minnesota and handed it over to Alerus Financial of Grand Forks, ND, which will acquire the assets and deposits of Prosperan Bank totalling $199.5 million and $175.6 million in deposits.

Gateway Bank in St Louis, with assets of $27.7 million and deposits of $27.9 million will be handed over to Central Bank of Kansas City.

FDIC said the failure of United Commercial Bank is expected to cost it an estimated $1.4 billion while the failure of the other four banks will have combined impact of $132.7 million.