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US banks closed by federal regulators

BANKS in Illinois and Washington state were closed by United States regulators, the first failures this year as a deepening recession and record foreclosures extend the US housing slump into a third year.

National Bank of Commerce in Berkeley, Illinois, with US$430.9 million in assets and US$402.1 million in deposits, was shut yesterday by the Office of the Comptroller of the Currency, and Bank of Clark County in Vancouver, Washington, with US$446.5 million in assets and US$366.5 million in deposits, was closed by state regulators.

The Federal Deposit Insurance Corp was named receiver for both, Bloomberg News said.

Republic Bank of Chicago in Oak Brook, Illinois, took over National Commerce's two offices near Chicago and reopened on Saturday, the FDIC said. Umpqua Bank of Roseburg, Oregon, is assuming Clark County's insured deposits and will open tomorrow.

"Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship," the FDIC said.

Regulators closed 25 banks last year, the most since 1993, draining money from the FDIC deposit insurance fund. The FDIC last month approved a budget for the coming year that almost doubles spending to US$2.2 billion from 2008 to hire staff for handling bank closures.

Republic Bank will assume all National Commerce deposits and buy US$366.6 million in assets at a US$44.9-million discount, with the FDIC holding the remaining assets.

Clark County is the first Washington bank to fail since Emerald City Bank in 1993.


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