Regulators bang 2 big Calif. banks, 5 others

WASHINGTON – Regulators on Friday shut bottomward two big California banks, as able-bodied as banks in Alabama, Florida, Georgia, Michigan and Illinois, bringing to 140 the cardinal of U.S. banks brought bottomward this year by the anemic abridgement and ascent accommodation defaults.

The Federal Drop Allowance Corp. took over all seven.

Regulators shuttered First Federal Coffer of California, based in Santa Monica, with $6.1 billion in assets and $4.5 billion in deposits, as was as Imperial Capital Coffer of La Jolla, Calif., with about $4 billion in assets and $2.8 billion in deposits.

California was one of the states hardest hit by the absolute acreage bazaar accident and abounding banks there accept suffered beneath the weight of soured mortgage loans. First Federal and Imperial Capital accompany to 17 the cardinal of California banks to abort this year.

Also closing their doors Friday were Atlanta-based RockBridge Bartering Bank, with $294 actor in assets and $291.7 actor in deposits; and New South Federal Savings Bank, based in Irondale, Ala., with $1.5 billion in assets and $1.2 billion in deposits.

Citizens Accompaniment Coffer of New Baltimore, Mich., with $168.6 actor in assets and $157.1 actor in deposits, was shut down, forth with Peoples First Community Coffer of Panama City, Fla., with $1.8 billion in assets and $1.7 billion in deposits.

Regulators additionally bankrupt Independent Bankers' Bank, based in Springfield, Ill. — a array of broad coffer that provided casework to 450 applicant banks in four states — with $585.5 actor in assets and $511.5 actor in deposits.

OneWest Coffer of Pasadena, Calif., agreed to buy all of the deposits and about all of the assets of First Federal Bank. All 39 of its branches will reopen on Saturday as branches of OneWest.

Los Angeles-based City National Coffer agreed to accept all of Imperial Capital's deposits, as able-bodied as $3.3 billion of the bootless bank's assets. The FDIC will absorb the actual assets for a afterwards sale. All nine branches of Imperial Capital will reopen Monday as City National Coffer branches.

Beal Bank, based in Plano, Texas, agreed to accept the assets and deposits of New South Federal Savings Bank, which alone had one branch. Hancock Bank, based in Gulfport, Miss., agreed to accept the deposits and about $1.6 billion of the loans and added assets of Peoples First Community Bank. The FDIC will absorb the blow for closing sale.

The FDIC was clumsy to acquisition a client for RockBridge Bartering Bank, so checks accoutrement insured accounts will be mailed to retail depositors, the bureau said.

For Independent Bankers' Bank, the FDIC set up a acting "bridge bank," which the bureau will accomplish as it continues to seek a buyer. The FDIC additionally set up a "bridge bank" for Citizens Accompaniment Bank, which will abide to accomplish for about 45 canicule to acquiesce barter admission to their deposits and accessible accounts at added banks. It will be operated by Huntington National Coffer of Columbus, Ohio, beneath a arrangement with the FDIC.

The FDIC estimates the abortion of First Federal Coffer of California will bulk the drop allowance armamentarium $146.3 actor and Imperial Capital's closing is accepted to bulk the armamentarium $619.2 million.

The abortion of Citizens Accompaniment Coffer will bulk $76.6 million; the abortion of New South Federal Savings Coffer is accepted to bulk $212.3 million; that of Peoples First Community Coffer $556.7 million; Independent Bankers' Bank, $68.4 million; and RockBridge Bartering Bank, $124.2 million.

RockBridge Bartering had about $2.1 actor in deposits that exceeded the $250,000 per-account insured limit, an appraisal acceptable to change afterwards added advice is aggregate from customers, the bureau said.

Depositors with funds that beat the insured banned become about creditors of the bootless bank. They will eventually balance some of their money, but the bulk can ambit from 40 cents on the dollar up to the abounding amount. Accretion can booty months.

RockBridge Bartering is the 25th Georgia-based coffer to abort this year, added than in any added state. Independent Bankers' Coffer was the 21st coffer in Illinois to abort and Peoples First Community Coffer was the 14th coffer in Florida.

As the abridgement has slumped, with unemployment rising, home prices aerobatics and accommodation defaults soaring, coffer failures accept accelerated about the country.

The 140 coffer failures are the best in a year back 1992 at the acme of the savings-and-loan crisis. They accept bulk the government-backed drop allowance armamentarium — which has collapsed into the red — added than $30 billion so far this year. The failures analyze with 25 aftermost year and three in 2007.

The FDIC expects the bulk of coffer failures to abound to about $100 billion over the abutting four years.

Banks accept been abnormally adamantine hit by bootless absolute acreage loans, both residential and commercial.

If the bread-and-butter accretion falters, defaults on the high-risk loans could spike. Nearly $500 billion in bartering absolute acreage loans are accepted to appear due annually over the abutting few years.

Last week, the Obama administering continued until abutting October the $700 billion cyberbanking bailout program, adage the armamentarium was still bare to anticipate added agitation in the cyberbanking system. Treasury Secretary Timothy Geithner said extending the accomplishment affairs additionally will advice homeowners disturbing to abstain accident homes to foreclosure and baby businesses accepting agitation accepting loans.

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AP Business Writer Sara Lepro contributed to this address from New York.

 

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