The banks closed on Friday by the Federal Deposit Insurance Corporation were in California, Illinois, Texas and Arizona. They were divisions of privately held FBOP Corp., a bank holding company based in Oak Park., Ill.
U.S. Bank in Minneapolis, a division of US Bancorp, agreed to assume the deposits and most of the assets of the banks. The banks had combined assets of $19.4 billion and deposits of $15.4 billion at the end of September, the FDIC said.
The nine banks had 153 offices, which will reopen as U.S. Bank branches Saturday.
FBOP Corp., itself wasn't closed under the deal, grew from one bank with assets of $125 million in 1990. From 1990 to 2007 the company acquired 28 banks, according to its Web site.
The closing of nine banks in one day was the most the FDIC has shut since the financial crisis began taking down banks last year. The closings boost the number of failed U.S. banks this year to 115. In 1989, during the savings-and-loan crisis, the FDIC closed 534 banks, or about 10 a week.
California National Bank had 68 branches. About 100 FDIC employees arrived at the CalNational headquarters in downtown Los Angeles at around 6:15 p.m on Friday. They were seen fanning out into various offices around the building, a squat concrete structure that prominently displays the failed bank's name.
The FDIC simultaneously arrived at the bank's other branches, spokeswoman Roberta Valdez said. She said the FDIC would spend the weekend transferring the bank to U.S. Bank.
Besides California National Bank, the banks involved in the latest round were Bank USA, NA, in Phoenix; San Diego National Bank; Pacific National Bank in San Francisco; Park National Bank in Chicago; Community Bank of Lemont in Illinois; North Houston Bank, Madisonville State Bank, and Citizens National Bank in Teague, all in Texas.
Rick Hartnack, vice chairman of consumer banking for U.S. Bancorp, said the move complements its operations in California, Illinois and Arizona. The deal doubled the company's branches in California so that more than 20 percent of U.S. Bank's branch network will be in the state.
The company will have nearly 3,000 branches in two dozen states.
"California and Chicago turned out to be two of the most attractive markets in the country where we just didn't have the branch density that we wanted," he said.
US Bancorp in October reported a 4.7 percent increase in its third-quarter earnings and said it wasn't seen bad loans grow as fast as they had been earlier this year. The company's stock fell 99 cents, or 4.1 percent, to $23.22 as part of a broad slide in stocks Friday.
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 deposit insurance fund. It has fallen into the red.
The FDIC expects Friday's closings will cost the fund $2.5 billion. The FDIC and U.S. Bank agreed to share losses on about $14.4 billion of the combined purchased assets of $18.2 billion.
Failures have been especially concentrated in California, Georgia and Illinois. While the pounding from losses on home mortgages may be nearing an end, delinquencies on commercial real estate loans remain a hot spot of potential trouble, regulators say. If the recession deepens, defaults on the high-risk loans could spike. Many regional banks, especially, hold large concentrations of these loans.
