WASHINGTON — It was another busy Friday night for the Federal Deposit Insurance Corp., as three more failures brought the year's total to nine.
Two state-chartered banks in California — $1.7 billion-asset County Bank, in Merced, and $1.14 billion Alliance Bank — had their deposits and virtually all their assets folded into other institutions. The FDIC entered into loss-sharing agreements with the acquirers of both to seal the deals.
Earlier on Friday, regulators closed $337 million-asset FirstBank Financial Services in McDonough, Ga. — also a state-chartered bank — and transferred its $279 million of deposits to Regions Bank in Birmingham, Ala.
It was the second consecutive week in which three failures happened in one day. Just six weeks into the new year, failure activity has already exceeded one-third of all of the insolvencies last year. (Twenty-five institutions were closed in 2008).
County Bank's 39 branches will reopen as part of Westamerica Bank, a San Rafael institution which in addition to assuming all of the County's $1.3 billion in deposits also bought its remaining assets. The FDIC estimated the failure would cost the agency $135 million.
The FDIC said Alliance Bank's $951 million in deposits would be transferred to California Bank & Trust in San Diego. The acquirer also agreed to buy 98% of Alliance's assets at a $9.9 million discount.
The agency said Alliance's five branches would reopen Monday as part of the San Diego bank. The failure is estimated to cost the FDIC $206 million, the agency said.
The agency said both transactions included agreements in which the FDIC will share losses from the failed banks' assets. The agency did not disclose details of those agreements for either deal, but the arrangements appear similar to others the FDIC has struck for failed bank assets to attract acquirers.
FirstBank's four branches will reopen on Monday as branches of Regions, the FDIC said.
Regions also agreed to buy $17 million of FirstBank's assets. The FDIC said that failure is estimated to cost $111 million.