US closes two more banks, 63 so far in 2011

WASHINGTON: US regulators closed two banks on Friday, bringing the total number closed in 2011 to 63, but the pace of closures has slowed.

A year ago, 157 banks failed, and there were 140 failures in 2009. The bulk of the failures have increasingly been smaller institutions, with less than $1 billion in assets.

This year's bank failures illustrate the problems facing small community banks, many of which are hard hit by the slow economic recovery.

The Federal Deposit Insurance Corporation (FDIC) said on Friday that the Bank of Shorewood in Shorewood, Illinois, had been closed. It said the banks's three branches would reopen on Saturday as part of Heartland Bank and Trust Company.

The Bank of Shorewood had approximately $110.7 million in total assets and $104.0 million in total deposits as of June 30, 2011.

The FDIC also said that Bank of Whitman in Colfax, Washington, had been closed.

It said eight of the 20 branches of the bank would reopen during their normal business hours beginning on Monday as branches of Columbia State Bank. The deposits of the remaining 12 banks will be transferred to Columbia State Bank, and those branches will not reopen.

As of June 30, 2011, Bank of Whitman had about $548.6 million in total assets and $515.7 million in total deposits.

On July 26, acting FDIC Chairman Martin Gruenberg told the Senate Banking Committee that the balance of the insurance fund the FDIC uses to cover the cost of failed banks headed into positive territory in June after going negative during the financial crisis.

Copyright Reuters, 2011