* Largest was a San Diego bank with $335.8 mln in assets
* City National Bank CYN.N enters agreement for assets
* Other failures were in Florida, Arizona, Minnesota
(Updates with two additional banks)
WASHINGTON, May 7 U.S. regulators on Friday
shuttered four more small U.S. banks, adding to the tide of
bank failures that is supposed to peak in the third quarter.
The Federal Deposit Insurance Corp said a total of 68 banks
have so far failed this year. Community banks have been failing
at a rapid pace, as their recovery has lagged behind the
rebound for larger financial firms and the overall economy.
Many small banks are still struggling with large portfolios
of troubled loans. Community banks tend to have larger
concentrations of commercial real estate loans than regional
banks. That segment of loans have taken longer to unravel than
portfolios of loans tied to mortgages.
The largest of the failures on Friday was 1st Pacific Bank
of California, in San Diego, with about $335.8 million in
assets and $291.2 million in deposits.
City National Bank, Los Angeles CYN.N [CYNBA.UL] will
assume 1st Pacific's deposits and agreed to buy its assets. The
FDIC said it entered into a loss-share agreement with City
National on $275.7 million of the assets.
The cost of the failure to the Deposit Insurance Fund will
be $87.7 million, the FDIC estimated.
The FDIC said the other failures on Friday were:
* Bank of Bonifay in Bonifay, Florida, with about $242.9
million in total assets. First Federal Bank of Florida, Lake
City, Florida, will assume Bank of Bonifay's $230.2 million in
deposits, as well as about $78.1 million of its assets. The
failure will cost the insurance fund about $78.7 million.
* Towne Bank of Arizona in Mesa, Arizona, with about $120.2
million in assets. Commerce Bank of Arizona in Tucson will
assume the deposits and buy the assets. The FDIC said it
entered into a loss-share agreement with Commerce Bank on $80.1
million of the assets. The failure will cost the insurance fund
* Access Bank of Champlin, Minnesota, with about $32
million in assets. PrinsBank of Prinsburg, Minnesota, will
assume the bank's deposits and almost all of its assets. The
failure will cost the insurance fund $5.5 million.
The government insures customer deposits up to $250,000 per
Bank failures are expected to peak in the coming months,
and the total of collapses this year is expected to exceed the
140 failures in 2009.
FDIC Chairman Sheila Bair said recently she sees
encouraging signs in the recovery of community banks.
She said more small banks are raising significant amounts
of fresh capital, helping some institutions avert failure.
Bair also said recently that auctions for failed banks are
fetching better pricing, indicating that bidders see better
values in troubled banks' loan portfolios and that the overall
credit environment is improving.
The agency estimates that the total bill for bank failures
will come to $100 billion from 2009 through 2013.
(Reporting by Roberta Rampton; Editing by Gary Hill and Carol