Bank Failures in the U.S.

Total U.S. Bank Failures in 2009 as of November 20: 124
Problem Bank List Rises to 416 (August 2009)
FDIC's Problem Bank List Tops 300 in 1st Quarter 2009
Full List of Bailed-out Banks

Big California Bank Fails, Has China Branches

November 7, 2009

* Big San Francisco bank serving Chinese community closed
* UCB, bought by East West, is 120th U.S. failure this year
* Beijing says China operations of closed bank are sound

Reuters - United Commercial Bank, a big San Francisco bank with branches in China, was closed by state regulators on Friday and its banking operations were acquired by East West Bancorp Inc, also active in both nations.

East West said the transaction made it the second-largest independent bank in California. Based in Pasadena, East West has 137 U.S. branches, including offices in New York, Atlanta, Boston and Seattle, and four in China.

United Commercial Bank, with assets of $11.2 billion, was the 120th U.S. bank to fail this year. Regulators closed four other banks on Friday, in Georgia, Michigan, Missouri and Minnesota. Failures already were the highest since 1992.

Banks are struggling to clean up their balance sheets as loans made during the credit boom continue to deteriorate. The FDIC has said the pace of failures will remain elevated through next year.

Last year 25 institutions were closed by regulators, compared to three in all of 2007.

Dominic Ng, chief executive of East West Bank, said the transaction was "a transformational event" that strengthened his bank's position. East West's assets increased to $19 billion, from $12.5 billion...

The FDIC insurance fund's balance went negative as of the end of the third quarter, but the FDIC is careful to emphasize that it has plenty of access to cash to operate and protect bank deposits. The agency has estimated the total cost of failures will reach $100 billion from 2009 through 2013.

The FDIC board will meet next week to finalize its proposal to have banks prepay three years of industry assessments, which would give the government cash to handle the rising tide of bank failures.

During the current financial crisis, Seattle-based lender Washington Mutual became the biggest bank to fail in U.S. history. It had $307 billion in assets when it was closed in September 2008 while suffering from losses from soured mortgages and liquidity problems.