United Commercial BankAmong Friday's failed banks, the largest by far was United Commercial Bank. The bank had a strong focus on serving Chinese-American customers in the U.S. and had rapidly built a large commercial real estate and construction portfolio in recent years. United Commercial was also expanding its business in China. The bank had agreed to a Federal Deposit Insurance Corp. cease-and-desist order on Sep. 3. Among the requirements of the order were hiring qualified management, improving board of directors oversight and raising a significant amount of capital. With a second-quarter net loss of $263 million and nonperforming assets (including nonaccruing loans and repossessed real estate) making up 6.82% of total assets -- even after the bank charged off $558 million in loans during the first half of the year -- United Commercial was undercapitalized as of June 30, with a total risk-based capital ratio of 7.92%. This ratio needs to be at least 10% for most banks to be considered well-capitalized under regulatory guidelines. > > Bull or Bear? Vote in Our Poll
Other FailuresThe Georgia Department of Banking and Finance closed United Security Bank of Sparta, Ga. The FDIC was appointed receiver and sold the failed bank's deposits and its total assets of $157 million to Ameris Bank of Moultrie, Ga., a subsidiary of Ameris Bancorp ( ABCB). The FDIC agreed to share in losses on $123 million of the acquired assets and estimated the cost to its insurance fund would be $58 million. United Security's two offices were scheduled to reopen Saturday as Ameris branches. The Office of Thrift Supervision shut down Home Federal Savings Bank of Detroit and appointed the FDIC receiver. The FDIC arranged for Liberty Bank and Trust of New Orleans to assume the failed thrift's deposits and its $14.9 million in total assets. Home Federal's two offices were set to reopen during normal business hours as Liberty branches, and although the FDIC didn't mention a loss-sharing agreement, the agency estimated the cost to the insurance fund would be $5.4 million.
Ongoing Bank Failure CoverageAll previous bank and thrift failures for 2008 and 2009 are detailed in TheStreet.com's interactive bank failure map: