United Commercial Bank, a big San Francisco bank with branches in China, was closed by state regulators last Friday, and its banking operations were acquired by East West Bancorp Inc, also active in both nations.

East West said the transaction made it the second-largest independent bank in California. Based in Pasadena, East West has 137 United States branches, including offices in New York, Atlanta, Boston and Seattle, and four in China.

United Commercial Bank, with assets of US$11.2 billion, was the 120th US bank to fail this year. Regulators closed four other banks last Friday, in Georgia, Michigan, Missouri and Minnesota. Failures already were the highest since 1992.

Banks are struggling to clean up their balance sheets as loans made during the credit boom continue to deteriorate. The Federal Deposit Insurance Corp has said the pace of failures will remain elevated through next year.

Last year 25 institutions were closed by regulators, compared with three in all of 2007.

Dominic Ng, chief executive of East West Bank, said the transaction was "a transformational event" that strengthened his bank's position. East West's assets increased to US$19 billion, from US$12.5 billion.

United Commercial Bank had 63 US branches, a branch in Hong Kong and a subsidiary, UCB-China, in Shanghai. They will now reopen as part of East West Bank.

The China Banking Regulatory Commission said UCB-China had ample liquidity and capital. It said the bank had total assets of 2.66 billion yuan (US$390 million). With liabilities of 1.754 billion yuan, its net assets were 913 million yuan, the regulator said in a statement posted on its Website.

The CBRC said it would work closely with the FDIC to maintain the stability of UCB-China.

It said it had conducted a preliminary examination of East West Bank's fitness to take over UCB-China and was now deliberating on the matter in accordance with Chinese laws.

China Minsheng Banking Corp owns 9.9 percent of UCBH Holdings Inc, the parent of United Commercial Bank, which was the biggest lender in the US serving the Chinese community.