WASHINGTON ( TheStreet) -- State and federal regulators closed four banks and one small thrift Friday, bringing the total number of U.S. banking failures this year to 120.

The failed institutions included United Commercial Bank of San Francisco, the main subsidiary of UCBH Holdings ( UCBH). The bank had $11.2 billion in total assets and was the seventh largest failure during the 2008-2009 crisis.

All five institutions were included in TheStreet.com's list of undercapitalized banks and thrifts. Of the 116 banks and thrifts that were undercapitalized at the end of the second quarter, 30 have already failed.

United Commercial Bank

Among 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.

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Although the FDIC order gave the bank until the end of the year to raise capital, the writing was on the wall, as United Commercial experienced a very significant deposit outflow. Deposits declined to approximately $7.5 billion when the bank was shut down. That compares with $9 billion as of June 30.

The FDIC was appointed receiver and sold the failed bank's deposits and $10.2 billion of its assets to East West Bank of Pasadena, Calif., which also has operations in China and is a subsidiary of East West Bancorp ( EWBC).

United Commercial's 63 domestic branches were set to reopen Saturday as branches of East West Bank, and United Commercial's UCB-China subsidiary in Shanghai will continue operating as a subsidiary of East West Bancorp, with prior approval from the China Banking Regulatory Commission. The FDIC agreed to share in losses on $7.7 billion of the assets acquired by East West Bank and estimated the cost to its insurance fund of United Commercial's failure would be $1.4 billion.

Other Failures

The 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.

State regulators in Minnesota shuttered Prosperan Bank of Oakdale, Minn. Acting as receiver, the FDIC sold the failed bank's deposits and about $174 million of its $200 million in assets to Alerus Financial NA of Grand Forks, N.D., a subsidiary of Alerus Financial ( ALRS.PK ). The failed institution's three branches were set to reopen during normal business hours as Alerus branches. The FDIC agreed to share in losses on the acquired assets and estimated the cost to its insurance fund would be $60.1 million.

The Missouri Division of Finance took over Gateway Bank of St. Louis and appointed the FDIC receiver. The FDIC arranged for Central Bank of Kansas City to assume the failed bank's deposits and its total assets of $27.7 million. Gateway's office was to reopen Saturday as a branch of Central Bank, and the FDIC estimated the cost to its insurance fund would be $9.2 million.

Ongoing Bank Failure Coverage

All previous bank and thrift failures for 2008 and 2009 are detailed in TheStreet.com's interactive bank failure map:
chart

The bank failure map is color-coded, with states having the greatest number of failures highlighted in red, and states with no failures in grey. By hovering your mouse over a state you can see the combined 2008-2009 totals for that state. Then click on the state to open a detailed map pinpointing the location of each bank failure and providing additional information about the failure.

Georgia leads all states with 26 bank or thrift failures during 2008 and 2009, followed by Illinois with 20, California with 19 and Florida with 11.

Large holding companies acquiring failed institutions during 2008 and 2009 have included J.P. Morgan Chase ( JPM), which acquired Washington Mutual, the largest-ever bank or thrift to fail in the U.S; U.S. Bancorp ( USB); SunTrust Banks ( STI); Regions Financial ( RF); Fifth Third Bancorp ( FITB); Zions Bancorp ( ZION); PNC Financial ( PNC); and BB&T ( BBT).

Free Financial Strength Ratings

One of the most important steps the FDIC has taken to curtail the likelihood of bank failures is its temporary increase of the basic limit on individual deposit insurance coverage to $250,000 from $100,000. This increase has been extended through 2013.

The FDIC has also temporarily waived all deposit insurance limits for business transaction accounts (checking accounts). This waiver is set to expire on June 30, 2010, after which business checking accounts will go back to the $100,000 deposit insurance limit.

This means it will be more important than ever for business and municipal entities such as school districts to carefully monitor the health of their banks. It's very easy to have more than $100,000 of somebody else's money flowing through a business account.

TheStreet.com Ratings issues independent and very conservative financial strength ratings on each of the nation's 8,500 banks and savings and loans. They are available at no charge on the Banks & Thrifts Screener.

In addition, the Financial Strength Ratings for 4,000 life, health, annuity, and property/casualty insurers are available on the Insurers & HMOs Screener.

TheStreet.com Ratings also provides award-winning stock ratings, which are available on the Stock Ratings Screener.

TheStreet.com Ratings was recently ranked the No. 1 independent stock selector during the market meltdown by BNY ConvergEx Group's BNY Jaywalk.

-- Written by Philip van Doorn in Jupiter Fla.

Philip W. van Doorn joined TheStreet.com Ratings., Inc., in February 2007. He is the senior analyst responsible for assigning financial strength ratings to banks and savings and loan institutions. He also comments on industry and regulatory trends. Mr. van Doorn has fifteen years experience, having served as a loan operations officer at Riverside National Bank in Fort Pierce, Florida, and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a Bachelor of Science in business administration from Long Island University.

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