“Falling to New Levels”

Last Friday five (5) more banks were taken over by the FDIC at a cost of approximately $1.55 billion. That brings the total number of failures to 120 in 2009.

There were a few significant points in this week’s seizures that should be made. Georgia lost another bank, this one in Sparta, bringing the total number of bank failures to 21 in the peach state.

In California another large bank failed. United Commercial Bank headquartered in San Francisco succumbed to the economic conditions at a cost of $1.4 billion to the Federal Deposit Insurance Fund. It was the 15th bank failure in California this year. It was assumed by Pasadena, California based East West Bancorp.

East West Bancorp will add 63 branches to its 137 branches throughout the U.S.. Thirty of United Commercial’s branches were in California, the rest in five other states. East West will also take over UCB’s 2 banking operations in China, one in Hong Kong, the other in Shanghai.

The acquisition will make East West Bank California’s second largest bank and the nation’s largest bank servicing the Asian American community.

No number was given for the shared loss agreement between East West Bancorp and the FDIC. But, be assured, there will be more losses.

The final tally for the FDIF remains to be seen, but it could far exceed the cost of the S&L crisis of the 80’s and 90’s which cost the FSLIC and FDIC over $124 billion before the crisis was over.

More next week!

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