Regulators Close Failed Banks in Georgia, California
Regulators on Friday closed FirstBank Financial Services in Georgia and two California banks, Alliance Bank and County Bank, marking nine failures this year of federally insured institutions.
The Federal Deposit Insurance Corp. was appointed receiver of the three banks. FirstBank Financial, based in McDonough, Ga., had $337 million in assets and $279 million in deposits as of Dec. 31. Alliance Bank , based in Culver City, Calif., had about $1.14 billion in assets and $951 million in deposits as of year's end. Merced, Calif.-based County Bank had around $1.7 billion in assets and $1.3 billion in deposits as of Feb. 2.
Twenty-five U.S. banks failed last year, far more than in the previous five years combined. The six failures announced in the last two weeks are double the total for all of 2007.
It's expected that many more banks won't survive this year amid the pressures of tumbling home prices, rising mortgage foreclosures and tighter credit. Some may have to merge with other institutions.
The FDIC said FirstBank Financial's deposits will be assumed by Regions Bank in Birmingham, Ala. Its four branches will reopen Monday as offices of Regions Bank. Regions Bank also agreed to buy around $17 million of FirstBank's assets; the FDIC will retain the rest for eventual sale.
Alliance Bank's deposits will be assumed by San Diego-based California Bank & Trust, which also agreed to buy about $1.12 billion in assets. The FDIC will keep the rest for eventual sale. In addition, California Bank & Trust agreed to share losses on the assets with the FDIC. Alliance Bank's five branches will reopen Monday as offices of California Bank & Trust.
Westamerica Bank, based in San Rafael, Calif., agreed to purchase all the deposits and assets of County Bank. Westamerica also is sharing losses with the FDIC. County Bank's 39 branches will reopen as branches of Westamerica, some on Saturday and others on Monday.
