UPDATE 3-U.S. closes six banks; 2010 failures now 157

* U.S. closes six banks; closures in 2010 total 157

* Total failures now exceed 2009 total, may be peak year

* FDIC’s Bair warns banks to be prudent about reserves
(Rewrites first paragraph; adds background, details)

By Glenn Somerville

WASHINGTON, Dec 17 (BestGrowthStock) – U.S. authorities closed six
more banks on Friday, bringing the number of closures so far
this year to 157 as the aftermath of the 2007-2009 financial
crisis continued to take a toll.

Smaller financial institutions, in particular, continue to
feel the impact of the struggling housing market, weak economy
and high unemployment. The bulk of this year’s closures have
been smaller institutions, each with less than $1 billion in
assets. Large banks have recovered more quickly from the
financial crisis.

The Federal Deposit Insurance Corp (FDIC) has said it
expects bank closures to peak this year after 140 closures in
2009.

The FDIC announced the following closures on Friday:

* Appalachian Community Bank of McCaysville, Georgia; had
assets of $68.2 million. Peoples Bank of East Tennessee of
Madisonville, Tennessee, to assume the deposits

* Chestatee State Bank of Dawsonville, Georgia; had assets
of $244.4 million. Bank of the Ozarks of Little Rock, Arkansas,
to assume the deposits.

* Bank of Miami, National Association of Coral Gables,
Florida; had assets of $448.2 million. 1st United Bank of Boca
Raton, Florida (FUBC.O: ) to assume the deposits.

* United Americas Bank, National Association, of Atlanta,
Georgia; had assets of $193.8 million. State Bank and Trust
Company of Macon, Georgia to assume the deposits.

* Community National Bank of Lino Lakes, Minnesota; had
assets of $31.6 million. Farmers & merchants Bank of
Manchester, Iowa to assume deposits.

* First Southern Bank of Batesville; had assets of $191.8
million. Southern Bank of Poplar Bluff, Missouri to assume
deposits.

DOLLAR LOSSES WANING

FDIC Chairman Sheila Bair has said that while the number of
failures already exceeds the 2009 tally of 140, the total
assets of this year’s failures will probably be lower.

On Nov. 23 the FDIC released its latest quarterly report on
the state of the banking industry (Read more about the banking industry recovery.). It showed that the industry
overall continues to recover from the financial crisis but that
large banks are doing better than smaller institutions.

The net income for the banking industry (Read more about the banking industry recovery.) was $14.5 billion
for the third quarter, which compares to $21.4 billion in the
second quarter and $2 billion in the third quarter of 2009,
according to the FDIC.

The banking industry (Read more about the banking industry recovery.) has been setting aside less money to
guard against losses, helping to boost earnings in recent
quarters.

Bair cautioned against banks reducing these reserves too
quickly given the state of the economy.

Despite the improving revenues numbers for the industry as
a whole, community banks continue to be hit hard by the weak
economy and the amount of bad loans on their books,
particularly in the commercial real estate sector.

For instance, the number of banks on the agency’s “problem
list” grew to 860 from 829, to reach the highest number since
March of 1993 when there were 928 institutions on the list.
Most of these institutions will not fail but the list provides
an indication of how many banks are struggling.
(Reporting by Glenn Somerville; Additional reporting by Dave
Clarke; Editing by Richard Chang)

UPDATE 3-U.S. closes six banks; 2010 failures now 157