Monday, November 10, 2008

Failed US banks - Seized

SAN FRANCISCO (MarketWatch) -- The Federal Deposit Insurance Corp. and state regulators seized Los Angeles-based Security Pacific Bank late Friday -- one of two banks to fail that day and the 19th to fail so far this year. Pacific Western Bank, also based in Los Angeles, will assume all of the deposits of Security Pacific, the FDIC said in a statement.
The four branches of Security Pacific will reopen on Monday as branches of Pacific Western. Depositors of the failed bank will automatically become depositors of Pacific Western. Deposits will continue to be insured by the FDIC.
The FDIC estimates that the cost to the Deposit Insurance Fund will be $210 million. Pacific Western's acquisition of all deposits was the "least costly" resolution for the FDIC's Deposit Insurance Fund compared to alternatives, according to the statement. Security Pacific is the third bank to fail in California this year.

Houston-based Franklin Bank S.S.B. was closed by regulators Friday, the 18th bank failure this year amid the ongoing credit crisis. The Federal Deposit Insurance Corporation said in a statement that Franklin Bank (FBTX) had total assets of $5.1 billion as of Sept. 30 and $3.7 billion in total deposits.
El Campo, Texas-based Prosperity Bank will assume Franklin Bank's deposits for a premium of 1.7%, and Franklin's 46 offices will reopen as Prosperity branches, the FDIC said.
In addition, Prosperity Bank will purchase roughly $850 million of Franklin Bank's assets, according to the regulator.
The FDIC estimated that Franklin Bank's failure will cost its Deposit Insurance Fund between $1.4 billion and $1.6 billion. Shares of Franklin Bank slid more than 80% lower in after-hours trading, to $0.04 cents.

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