Irvine’s MetroPacific Bank is shut down
Regulators shut down community lenders Mirae Bank in Los Angeles’ Koreatown district and MetroPacific Bank in Irvine on Friday, saying both were operating with dangerously low capital cushions against losses. This brought the number of bank failures this year in California to six.
The five branches of Mirae Bank will reopen Monday as part of Wilshire State Bank, a larger Koreatown bank that will assume all $362 million of Mirae’s deposits. Wilshire, whose parent company is Wilshire Bancorp Inc., also will acquire $449 million of Mirae’s $465 million in assets, the Federal Deposit Insurance Corp. said. The FDIC agreed to share in any losses on those assets.
The failure is expected to cost the deposit insurance fund about $50 million.
MetroPacific Bank’s one office will reopen Monday as part of Sunwest Bank of Tustin.
Sunwest has agreed to take over all of MetroPacific’s $73 million in deposits, except for about $6 million that had been brought in through brokers. Those funds will be repaid to the brokers, according to the FDIC, which was appointed the receiver of the bank after it was seized by the state Department of Financial Institutions.
Sunwest also will buy nearly all of MetroPacific’s loans and other assets from the FDIC, which estimated that the failure would cost it $29 million.
Mirae was the 45th U.S. bank to be shut down this year. That total is up from 24 in all of 2008, three in 2007, and none in 2006 and 2005. Regulators have said they expect the wave of failures to continue, and the FDIC has hired about 400 people at an Irvine office to work for at least three years closing banks in the Western United States and selling their assets.
Also Friday, regulators closed two small banks in Georgia. The FDIC said the cost to the deposit-insurance fund would be about $152 million for the two combined. And a bank in Minnesota failed at a cost of about $34 million to the FDIC, state regulators said.
The FDIC also said Friday that it and state bank regulators had ordered Golden Security Bank, a state-chartered thrift based in Rosemead, to raise capital, improve its “unsatisfactory lending practices” and show it is being run by executives capable of “upgrading a low-quality loan portfolio.”
Golden Security, founded in 1982 in Los Angeles’ Chinatown, works with loan brokers to make residential and construction loans in low- and moderate-income areas. Its website said it has “a reputation for making real estate loans bigger lenders don’t make.”
Its executives and board members couldn’t be reached for comment on their plans to raise money.