United Commercial Bank, a subsidiary of UCBH Holdings, was shut down on Friday and its assets acquired by East West Bancorp (NASDAQ: EWBC), becoming the 120th bank to fail so far in 2009. United Commercial Bank was based in San Francisco.

Four other banks closed on Friday, which were located in Georgia, Minnesota, Missouri and Michigan.

According to East West, which is based in Pasadena, the acquisition now makes them the second largest independent bank in California. The transition from United Commerical Bank to East West Bancorp shouldn’t be too difficult, as they served similar markets, especially a strong presence in China, which East West also has. East West also has offices in Seattle, Atlanta, Boston and New York.

As part of the deal, East West will take over $10.2 billion of the assets of United Commercial, and forged a loss-share transaction with the Federal Deposit Insurance Corporation for $7.7 billion in losses. The Deposit Insurance Fund of the FDIC will incur another hit of $1.4 billion from the closure of the bank.

The major reason for closing the bank was cited as the inability to raise more capital reserves, according to the California Department of Financial Institutions.

Assets for East West after the deal now stand at about $19 billion, a significant increase from its $12.5 billion in assets prior to the failure of United Commercial.

Along with its 63 branches in the U.S., United Commercial Bank also had a branch in Hong Kong and a Shanghai subsidiary, UCB-China. Once they reopen they will operate under the East West moniker.

UCB-China has plenty of liquidity and capital to continue its operations in the country, said officials from China’s Banking Regulatory Commission.
 
United Commercial Bank was the largest lender to the American Chinese community, and Minsheng Banking Corp. held a 9.9 percent stake in its parent, UCBH Holdings Inc.

Still operating in the negative, the Deposit Insurance Fund has more pressure on it after these five bank closings on Friday, but the FDIC, which has projected losses of $100 billion through 2013, said special assessments to the banking industry will help raise funds to deal with the short-term situation.