Banks still failing

WASHINGTON (AP) -- Regulators have shut down three banks in Puerto Rico and one each in Michigan and Missouri, bringing the number of U.S. bank failures this year to 62.

The Federal Deposit Insurance Corp. took over the banks: Westernbank Puerto Rico, based in Mayaguez, with about $11.9 billion in assets; R-G Premier Bank of Puerto Rico, based in Hato Rey, with around $5.9 billion in assets; and San Juan-based Eurobank, with $2.5 billion in assets.

The FDIC also seized CF Bancorp, based in Port Huron, Mich., with about $1.6 billion in assets; and Champion Bank, in Creve Coeur, Mo., with $187.3 million in assets.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

WASHINGTON (AP) -- Regulators on Friday shut down three banks in Puerto Rico, bringing the number of U.S. bank failures this year to 60.

The Federal Deposit Insurance Corp. took over the banks: Westernbank Puerto Rico, based in Mayaguez, with about $11.9 billion in assets; R-G Premier Bank of Puerto Rico, based in Hato Rey, with around $5.9 billion in assets; and San Juan-based Eurobank, with $2.5 billion in assets.

Banco Popular de Puerto Rico agreed to acquire the deposits and about $9.4 billion of Westernbank's assets. The FDIC will keep the remainder for eventual sale. Scotiabank de Puerto Rico agreed to buy all the assets and deposits of R-G Premier Bank. And Oriental Bank and Trust is acquiring all the assets and deposits of Eurobank. The three acquiring banks are based in San Juan, the Puerto Rican capital.

In addition, the FDIC and Banco Popular agreed to share losses on $8.8 billion of Westernbank's loans and other assets. The agency and Scotiabank agreed to share losses on $5.4 billion of R-G Premier Bank's assets, while the FDIC and Oriental Bank and Trust are to share losses on $1.6 billion of Eurobank's assets.

The failure of Westernbank is expected to cost the deposit insurance fund $3.3 billion; the failure of R-G Premier Bank is expected to cost $1.2 billion; that of Eurobank, $743.9 million.

There were 140 bank failures in the U.S. last year, the highest annual tally since 1992, at the height of the savings and loan crisis. They cost the insurance fund more than $30 billion. Twenty-five banks failed in 2008 and only three succumbed in 2007.

The number of bank failures likely will peak this year and will be slightly higher than in 2009, FDIC Chairman Sheila Bair said recently.

As losses have mounted on loans made for commercial property and development, the growing bank failures have sapped billions of dollars out of the deposit insurance fund. It fell into the red last year, hitting a $20.9 billion deficit as of Dec. 31.

The number of banks on the FDIC's confidential "problem" list jumped to 702 in the fourth quarter from 552 three months earlier, even as the industry squeezed out a small profit. Still, nearly one in every three banks reported a net loss for the latest quarter.

The FDIC expects the cost of resolving failed banks to grow to about $100 billion over the next four years.

The agency mandated last year that banks prepay about $45 billion in premiums, for 2010 through 2012, to replenish the insurance fund.

Depositors' money -- insured up to $250,000 per account -- is not at risk, with the FDIC backed by the government. Apart from the fund, the FDIC has about $66 billion in cash and securities available in reserve to cover losses at failed banks.