November 6, 2010 / 1:04 AM / 8 years ago

CORRECTED - UPDATE 1-Regulators close three banks in US, 2010 total now 142

(Corrects name of the bank to M&T from NM&T)

* Regulators close three more small banks

* 2010 failed bank total now surpasses last year

* But assets of failed banks in 2010 lower than in 2009 (Recasts with third failed bank and adds more background)

WASHINGTON, Nov 5 (Reuters) - The number of bank failures this year surpassed the 2009 tally on Friday when the Federal Deposit Insurance Corp announced it closed three more banks.

Friday’s announcement brings the total failures to 142, moving past the 2009 total of 140.

FDIC Chairman Sheila Bair said recently that while the number of failures was expected to exceed the 2009 tally, the total assets of this year’s failures will probably be lower.

In 2009 the total amount of assets held by failed banks was $169.7 billion and so far in 2010 the total is $89.3 billion, according to the FDIC.

On Friday, regulators closed K Bank in Randallstown, Maryland, which had about $538.3 million in assets and $500.1 million in deposits. Buffalo, New York-based M&T Bank (MTB.N) will assume the deposits of K Bank and about $410.8 million of its assets, the FDIC said.

Regulators said they closed Pierce Commercial Bank of Tacoma, Washington, which had about $221.1 million in assets and $193.5 million in deposits.

Heritage Bank (HFWA.O) of Olympia, Washington agreed to assume the closed bank’s deposits and assets, the FDIC said.

Also closed was Western Commercial Bank in Woodland Hills, California, which had about $98.6 million in assets and $101.1 million in deposits.

First California Bank (FCAL.O), Westlake Village, California, will assume all the deposits and most of the assets, the FDIC said.

The three failures were expected to cost the FDIC’s deposit insurance fund an estimated total of $244.9 million.

Washington Mutual, which had $307 billion in assets when it was seized in September 2008, remains the largest bank to fail during the financial crisis.

In a good sign for the banking industry, the FDIC said on Oct. 19 that due to lower than expected losses it is now estimating that bank failures will cost the Deposit Insurance Fund $52 billion from 2010 through 2014, compared with a prior estimate of $60 billion.

The Deposit Insurance Fund, financed by banks that pay into the fund, guarantees individual accounts up to $250,000.

Because of that lowered cost estimate and because the Dodd-Frank reform legislation laid out new rules for the insurance fund, the FDIC voted on Oct. 19 to forego a 3-basis-point increase in bank fees that had been scheduled to go into effect on Jan. 1, 2011. (Reporting by Dave Clarke and Roberta Rampton; Editing by Gary Hill and Carol Bishopric)

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