Regulators Close Bank of San Pedro : Finance: Insufficient capital cited. Home Bank of Signal Hill to acquire assets.

State banking regulators Friday closed Bank of San Pedro, which had six branches and $123.4 million in assets, after real estate loans and operating losses had reduced the financial institution’s capital below acceptable levels.

Home Bank of Signal Hill will acquire $22.1 million of the failed bank’s assets and assume $82.2 million in insured deposits. The two Bank of San Pedro branches in San Pedro will reopen as Home Bank offices. The bank’s headquarters office and branches in Avalon, Gardena and Long Beach were closed by state officials.

Home Bank will decide whether to hire back Bank of San Pedro employees.

“Bank of San Pedro was operating in an unsafe manner, which necessitated the closure as a protection to depositors and creditors,” James E. Gilleran, the state’s banking superintendent, said in a statement.

“I am very pleased that an acquisition was successfully negotiated, because it provides assurance to most depositors of Bank of San Pedro that their banking business will continue without interruption,” he said.

About $6.4 million in 210 Bank of San Pedro accounts exceeded the federal insurance limit of $100,000 and will not be assumed by Home Bank. Gilleran placed the bank under the receivership of the Federal Deposit Insurance Corp.

Bank of San Pedro had been considered a “problem bank” since 1987, regulators said. The bank has sustained more than $4 million in operating losses since 1992.

Regulators determined that the bank was not viable after real estate and commercial loan losses had reduced its capital to $1.2 million. In addition, they said, the financial institution had been losing $200,000 a month.

Bank officials had tried to raise capital in negotiations with private parties and also tried to sell additional stock, the regulators said. However, those efforts failed to draw sufficient investment to bring the bank to acceptable capital levels.