Three more U.S. Banks fall victim to recession

Washington, February 7: Banks continue to fall as the recession deepens. The biggest financial crisis in more than 70 years led to the downfall of three more banks in the U.S.

With just over a month into the year, the number of banks that have shut shop, rather made to shut shop, is nine.

County Bank, FirstBank Financial Services Inc, and Alliance Bank are the latest victims of the current economic turmoil. Comptroller of the Currency John Dugan was apprehensive that the worst was yet to come. He said, “We do expect there to be more stress on banks, which could result in an increase in commercial bank failures.”

The County bank was acquired by San Rafael, California based Westamerica. The latter thus acquires deposits of $1.3 billion and assets of $1.7 billion. County Bank's 39 offices will now reopen as branches of Westamerica Bank.

Meanwhile, The FDIC has been named the receiver of McDonough-based FirstBank and Culver City-based Alliance Bank. Last year the FDIC had shut 25 banks. In January alone this year, regulators had seized six banks.

Alliance Bank has assets of $1.14 billion and deposits of $951 million. The FDIC has signed a pact with California Bank & Trust in San Diego to take over the deposits of the Alliance Bank.

The agreement will ensure that the interests of the depositors are taken care of. Alliance Bank's five offices will thus operate under the name of California Bank & Trust. Put together, these failures will cost the FDIC’s deposit insurance fund $452 million.

FirstBank found an acquirer in Regions Financial Corp. that will purchase about $17 million of FirstBank’s assets and takeover its deposits.

Regions Chief Executive Officer Dowd Ritter said, “It is our responsibility to work with and support the FDIC in finding solutions for depositors in these challenging times. We also felt it was important to be a safe harbor for all customers by assuming both insured and uninsured deposits.”