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 TheStreet.com's Bank Failure Roundup for a summary of previous bank and savings and loan failures during 2008 and 2009.
Mounting losses from soured commercial and construction loans in the Atlanta metropolitan area took their toll through 2008, with the institution posting a net loss of $25 million for 2008. Even after $9 million in net loan charge offs for the year, the institution's ratio of nonperforming assets to total assets was 34% as of Dec. 31. Regions Bank took over all of First Bank Financial's deposits, including uninsured balances and brokered deposits, and approximately $17 million in assets. The failed bank's four offices were set to reopen as Regions branches on Monday.
This was Zions Bancorporation's second acquisition of a relatively large failed community bank. The previous acquisition was Silver State Bank of Henderson, Nev., which failed in September. The FDIC estimated the loss to its insurance fund would be $206 million.