Regulators Close Troubled Brea Bank : Money: Mid City was deemed to be undercapitalized, forcing the takeover. It reopens as a Chino Valley branch today.

Mid City Bank, continuing to lose money from soured real estate construction and development loans, was seized and closed Thursday by federal banking regulators.

All deposits, including uninsured amounts, and certain assets of the small bank were sold to Chino Valley Bank in Ontario, which will reopen Mid City’s Brea branch as one of its own branches today, according to the Office of the Comptroller of the Currency.

Mid City’s Los Angeles branch will remain closed, but customers can obtain their funds from the Brea office. Dennis Brown, an FDIC official, said no one has lost any money because Chino Valley agreed to take all deposits as part of its business.

The OCC blamed “ineffective supervision” by directors and senior managers for Mid City’s problem loans.

The agency said that the bank’s capital--its last defense against losses--had dropped below 2% of its assets. That put it in a category called “critically undercapitalized” and made it subject to a federal takeover.

The agency moved in, though, only after it determined that Mid City couldn’t raise any more capital and couldn’t come up with any acceptable plan for correcting its condition.

Chino Valley paid $695,000 to acquire all $96.4 million in Mid City deposits and $35.5 million in good loans and other assets. The Federal Deposit Insurance Corp., which was appointed receiver for the failed bank, advanced $60.1 million to facilitate the transaction.

The remaining assets, which Mid City had valued at $68.9 million, were turned over to the FDIC to be liquidated in an effort to recoup the amount that was advanced.