First Bank of Beverly Hills, the Calabasas institution battered by losses on condominium construction loans, was seized by regulators Friday, becoming the second bank in Los Angeles County to fail this year.
The closure comes more than a week after the bank announced that a merger agreement with an investment firm had been terminated.
Unable to find a buyer for the bank's assets, the California Department of Financial Institutions closed First Bank of Beverly Hills and appointed the Federal Deposit Insurance Corp. as receiver.
As of Dec. 31, First Bank, which was owned by Beverly Hills Bancorp, had $1.5 billion in assets and $1 billion in deposits, of which about $179,000 was uninsured.
For customers with non-brokered deposits, the FDIC said it will mail customers checks for their insured money on Monday, April 27.
The bank becomes the 28th federally insured institution to fail in 2009 and the second in the county. Alliance Bank in Culver City was closed on Feb. 6.
First Bank's loan portfolio had become heavily weighted toward condo builders in recent years, and that made the bank vulnerable when the housing bust hit.
The bank lost more than $80 million in the fourth quarter, falling below the level considered "well-capitalized." On Feb. 13, the bank received a cease-and-desist order from the FDIC directing the bank to raise $70 million or sell itself.
On March 3, First Bank announced that it had reached a merger agreement with Orchard First Source Asset Management LLC of Rolling Meadows, Ill. That deal, however, was terminated April 15 for undisclosed reasons.
The FDIC estimated the failure will cost its insurance fund approximately $394 million.
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