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Banks Fail in Georgia, California

Regulators announced Friday that three more U.S. banks have failed, bringing the total for 2009 to nine.

State regulators closed FirstBank Financial Services of McDonough, Ga. and appointed the Federal Deposit Insurance Corporation receiver. The FDIC struck a deal with Regions Bank of Birmingham, Ala. (held by Regions Financial Corp. (RF)) in which Regions will assume all of the failed institution's deposits.

Meanwhile, The California Department of Financial Institutions shuttered Alliance Bank of Culver City, Calif. The FDIC (as usual) was named receiver and arranged for California Bank & Trust of San Diego (a subsidiary of Zions Bancorporation (ZION)) to assume all of Alliance's deposits.

California regulators also closed County Bank of Merced, Calif., with the FDIC arranging for Westamerica Bank of San Rafael, Calif. (held by Westamerica Bancorporation (WABC)), to take over all deposits.

Please see's Bank Failure Roundup for a summary of previous bank and savings and loan failures during 2008 and 2009.

FirstBank Financial Services Ratings assigned FirstBank Financial Services an E (Very Weak) financial strength rating in September, a downgrade from an E+ in June and a D- (Weak) in March. The institution, with total assets of $337 million and total deposits of $279 million, was one of the undercapitalized banks identified by early Friday, using preliminary Dec. 31 data, provided by Highline Financial.

FirstBank Financial Services was actually considered significantly undercapitalized under regulatory guidelines, with a tier-1 leverage ratio of 2.31% and a risk-based capital ratio of 4.46% as of Dec. 31. These ratios need to be at least 5% and 10%, respectively, for a bank to be considered well capitalized.

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