Federal regulators take over California National Bank

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The Federal Deposit Insurance Corp has taken over Los Angeles-based California National Bank.

Cal National's demise would be the fourth largest U.S. bank failure this year. The bank is also the fourth-biggest based in L.A. County. It's a unit of a privately-held Illinois company that holds seven other banks too.

The Times reports that U.S. Bank may acquire all of them. Cal National had half a billion dollars invested in Fannie Mae and Freddie Mac preferred securities. Their value dropped precipitously after last year's mortgage lender takeovers.

The bank had significantly more foreclosed properties on its books this year than last, and plenty of borrowers fell behind in repayments. If U.S. Bank takes over Cal National, the branches, including one in a building near KPCC's downtown L.A. newsroom, could open soon under the new name.