Four new closings put US bank failure list at 119

WASHINGTON, Nov 6 (Reuters) - Bank regulators closed banks in Georgia, Michigan, Missouri and Minnesota on Friday, pushing the toll of U.S. bank failures this year to 119 as deteriorating loans continue to take their toll on financial institutions.

By comparison, 25 U.S. banks were seized by officials in 2008, up from only 3 in 2007.

Chairman Sheila Bair of the Federal Deposit Insurance Corp has said bank failures will remain elevated, even as the economy begins to recover, because the bank industry is continuing to recognize loan losses and clean up balance sheets.

Bair says the industry's woes are migrating from residential loans and complex securities to more conventional types of retail and commercial loans that have been hit hard by the recession.

Closed on Friday were:

--United Security Bank, of Sparta, Georgia, with assets of $157 million. Ameris Bank, of Moultrie, Georgia, agreed to assume all the deposits. FDIC and Ameris Bank entered a share-loss transaction on approximately $123 million of United Security Bank's assets.

--Home Federal Savings Bank, of Detroit, with $14.9 million in assets and $12.8 million in deposits. Liberty Bank and Trust Co, of New Orleans, agreed to assume all the deposits and essentially all of the assets. The failure was estimated to cost the FDIC's insurance fund $5.4 million.

--Gateway Bank of St Louis, of St Louis, Missouri, with $27.7 million in assets and $27.9 million in deposits. The bank's sole office will reopen on Saturday as a branch of Central Bank of Kansas City, Missouri, which assumed Gateway's assets.

--Prosperan Bank, of Oakdale, Minnesota, which had assets of $199.5 million and deposits of $175.6 million. FDIC entered an agreement with Alerus Financial, National Association, of Grand Forks, North Dakota, to assume all of Prosperan's deposits. It purchased approximately $173.9 million of Prosperan's assets in a share-loss agreement with FDIC. Prosperan's three branches will reopen as Alerus branches.

The failures were estimated to cost the FDIC $58 million on United Security Bank, $5.4 million on Home Federal Savings Bank, $9.2 million on Gateway, $60.1 million on Prosperan.

During the current financial crisis, Seattle-based lender Washington Mutual became the biggest bank to fail in U.S. history. It had $307 billion in assets when it was closed in September 2008 while suffering from losses from soured mortgages and liquidity problems.

The FDIC insurance fund's balance turned negative at the end of the third quarter. The FDIC has proposed having banks prepay three years of industry fees to give the agency enough liquidity to cover the costs of failures.

The FDIC will insure up to $250,000 per account in the banks that were closed.

The agency also has a running tally of problem banks that its examiners closely monitor. At the end of the second quarter, 416 undisclosed institutions were on that list. (Reporting by Charles Abbott; Editing by Gary Hill)