Five more banks go under, including one with $11.2 billion in assets

By Chris Carey, Bailout Sleuth

Regulators seized five more financial institutions on Friday, including a bank in San Francisco that had $11.2 billion in assets and primarily served the Chinese-American community.

United Commercial Bank, which also had operations overseas, was the last to be shut down, making it the 120th bank to fail this year. The Federal Deposit Insurance Corp. arranged for East West Bank, which also serves the Asian-American market, to take over United Commercial’s 63 U.S. branches, as well as subsidiaries in Hong Kong and Shanghai.

East West Bank, based in Pasadena, Calif., bought United Commercial’s $7.5 billion in deposits, paying a premium of 1.1 percent. It also bought $10.2 billion of the failed bank’s assets, with $7.7 billion subject to a loss-sharing deal.

The other four banks shut down this week were Prosperan Bank, of Oakdale, Minn.; United Security Bank, of Sparta, Ga.; Gateway Bank of St. Louis, and Home Federal Savings Bank, of Detroit.

Alerus Financial NA, of Grand Forks, N.D., agreed to take over Prosperan’s three branches, its $175.6 million in deposits. It also bought $173.9 million of Prosperan’s $199.5 million in assets, with all of the acquired assets covered by a loss-sharing deal.

Ameris Bank, of Moultrie, Ga., took over United Security Bank’s two branches, along with its $150 million in deposits. Ameris also bought nearly all of the failed bank’s $157 million in assets, with $123 million subject to a loss-sharing agreement.

The FDIC arranged for Central Bank of Kansas City to take over Gateway Bank’s lone branch, as well as its $27.9 million in deposits and $27.7 million in assets.

Liberty Bank and Trust Co., of New Orleans, assumed the operations of Home Federal Savings. It acquired two branches, $12.8 million in deposits and $14.9 million in assets. The Office of Thrift Supervision had ordered Home Federal in March to find a buyer to help resolve its financial problems. 

Both Gateway Bank and Home Federal Savings were African-American owned financial institutions.

The FDIC said the latest closings would cost its already hard-hit insurance fund an estimated $1.53 billion. 

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