3 Banks Shut Down; Insurance Firm Merger Collapses

Three banks have closed and a major real estate insurance firm is tottering after a takeover deal fell through.

Federal regulators have shut down Downey Savings and Loan in Newport Beach, Calf. and PFF Bank & Trust in Ponoma, Calf. The Community Bank in Loganville, Ga. also has shut down.

The Office of Thrift Supervision shut down Downey S&L with $12.8 billion in assets and also PFF with $3.7 billion in assets. Both had been heavily exposed to the depressed real estate market in Southern California and their demise was anticipated. The federal regulator is selling the banks to U.S. Bank in Minneapolis. Part of Community Bank's $681 million in assets were sold to Bank of Essex in Virginia.
As of Nov. 21, 22 banks have failed so far this year.

Meanwhile, LandAmerica Financial Group, a Richmond, Va.-based title insurance and real estate services firm, is struggling since its planned merger with Fidelity National Financial, Inc. of Jacksonville, Fla. has collapsed. No reasons were given. When the merger was announced Nov. 7, LandAmerica's stock was valued at $128.4 million but since has fallen to $113.5 million. The firm has laid off 120 employees.