Regulators Shut Doors on Three More Banks

Regulators have shut Warren Bank in Michigan and and two small banks in Colorado and Minnesota. These closures bring the total to 98 banks closed this year.

The FDIC took over Warren Bank with about $538 million in assets. The Huntington National Bank agreed to assume the deposits and some of the assets of the assets of the failed bank. The FDIC will retain the remaining assets for later disposition. The failure of Warren Bank is expected to cost the deposit insurance fund an estimated $275 million.

Regulators also moved to shut the much smaller Jennings State Bank, in Minnesota. Central Bank agreed to assume the bank's $52.4 million in deposits and essentially all the bank's assets. The FDIC estimates the closing of Jennings State Bank will cost the deposit insurance fund about $11.7 million. A third bank, the Southern Colorado National Bank in Colorado was also clsoed. Legacy Bank agreed to assume the deposits and essentially all the assets of Southern Colorado National Bank. The FDIC said the closing will cost the deposit insurance fund about $6.6 million.

Ninety-eight banks have failed so far this year due to mounting losses on mortgages, commercial real estate and small business loans. The failures have cost the FDIC Insurance fund about $25 billion and the fund needs to raise cash to remain solvent.

Risk: FDIC, banks, credit, SME