Ameris to assume assets of closed Sparta bank

Regulators on Friday shut banks in Georgia, Michigan, Minnesota, Missouri, and California, bringing the number of bank failures this year to 120 amid the struggling economy and a cascade of defaults on loans.

The Federal Deposit Insurance Corp. took over United Commercial Bank in San Francisco, with $11.2 billion in assets and $7.5 billion in deposits. East West Bancorp Inc., parent company of East West Bank based in Pasadena, Calif., is buying all of the deposits and most of the failed bank's assets.

The FDIC also closed United Security Bank, based in Sparta (Ga.), with $157 million in assets and $150 million in deposits; Home Federal Savings Bank in Detroit, with $14.9 million in assets and $12.8 million in deposits; Prosperan Bank, based in Oakdale, Minn., with $199.5 million in assets and $175.6 million in deposits; and Gateway Bank in St. Louis, with $27.7 million in assets and $27.9 million in deposits.

Ameris Bank, based in Moultrie, agreed to assume the assets and deposits of United Security, while Liberty Bank and Trust Co., based in New Orleans, is buying the assets and deposits of Home Federal Savings.

Alerus Financial of Grand Forks, N.D., agreed to assume the assets and deposits of Prosperan Bank, while Central Bank of Kansas City is buying the assets and deposits of Gateway Bank.

The failure of United Commercial Bank is expected to cost the federal deposit insurance fund an estimated $1.4 billion; the failure of the other four banks a combined $132.7 million.

With United Security, 21 Georgia banks have failed this year, more than in any other state. Most of the failures have involved banks in the Atlanta area, where the collapse of the real estate market brought economic dislocation. Failures also have been especially concentrated in California and Illinois.

As the economy has soured, with unemployment rising, home prices tumbling and loan defaults soaring, bank failures have cascaded and sapped billions out of the federal deposit insurance fund. It has fallen into the red.