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Three more American banks are seized

THREE more United States banks, two in California and one in Georgia, have been seized by regulators, bringing this year's tally of closings to nine as a recession and record foreclosures extend the biggest financial crisis in more than 70 years.

County Bank of Merced, California, with deposits of US$1.3 billion and assets of US$1.7 billion, was shut last Friday by the state's Department of Financial Institutions, according to an e-mailed statement from the Federal Deposit Insurance Corp. Westamerica Bancorporation, holding company for Westamerica Bank, acquired all the assets and deposits, Bloomberg News reported.

The Georgia Department of Banking and Finance closed McDonough-based FirstBank Financial Services Inc, which had US$337 million in assets and US$279 million in deposits as of December 31, the FDIC said in a statement. The California Department of Financial Institutions shut Culver City-based Alliance Bank, with assets of US$1.14 billion and US$951 million in deposits.

The FDIC was named receiver of the institutions, which will resume business as branches of the acquiring banks.

Regulators seized six banks in January, the largest monthly toll since 1993, including Salt Lake City-based MagnetBank, which the FDIC closed on January 30 after being unable to find a buyer. The FDIC shuttered 25 banks last year, matching the total for 2001 through 2007.

The FDIC, other US bank regulators and the US Congress are taking steps to help banks avoid losses as the administration of President Barack Obama readies a stimulus package that may include guarantees for toxic assets, according to people familiar with the plan.

Legislation that would more than double deposit insurance coverage and offer safeguards for banks is being considered by Congress. The House Financial Services Committee unanimously approved a measure that would raise coverage to US$250,000 per depositor per bank, from US$100,000.

The latest bank failures will cost the FDIC's deposit insurance fund a combined US$452 million.

The fund is supported by fees paid by insured banks.


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