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Bank failures in Florida brings 2012 total to 45

Friday, 19 Oct 2012 | 7:06 PM ET

WASHINGTON -- Regulators say they have closed two small banks in Florida, bringing to 45 the number of U.S. bank failures this year.

The Federal Deposit Insurance Corp. seized GulfSouth Private Bank, based in Destin, and First East Side Savings Bank, based in Tamarac.

GulfSouth had about $159.1 million in assets and $151.1 million in deposits as of June 30.

SmartBank, based in Pigeon Forge, Tenn., agreed to assume all of GulfSouth's deposits and purchase essentially all of its assets.

First East Side had about $67.2 million in assets and $65.9 million in deposits.

Stearns Bank NA, based in St. Cloud, Minn., agreed to assume all of the bank's deposits and essentially all of its assets.

The two bank failures are expected to cost the deposit insurance fund $45.2 million.

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

Regulators said Friday that they closed a small bank in Florida, bringing to 44 the number of U.S. bank failures this year.

The Federal Deposit Insurance Corp. seized GulfSouth Private Bank, based in Destin, Fla.

The bank had about $159.1 million in assets and $151.1 million in deposits as of June 30.

SmartBank, based in Pigeon Forge, Tenn., agreed to assume all of the deposits and purchase essentially all of the failed lender's assets.

The failure of GulfSouth Private Bank, which had four branches, is expected to cost the deposit insurance fund $36.1 million.

GulfSouth Private Bank is the sixth FDIC-insured institution in Florida to fail this year.

U.S. bank closures are running at a slower pace than in 2011. By this time last year, 80 banks had failed.

Bank closures peaked in 2010 in the wake of the financial crisis. In 2007, just three banks went under. That number jumped to 25 in 2008, after the meltdown, and ballooned to 140 in 2009.

In 2010, regulators seized 157 banks, the most in any year since the savings and loan crisis two decades ago. The FDIC has said 2010 likely was the high-water mark for bank failures from the Great Recession. They declined to a total of 92 in 2011.

From 2008 through 2011, bank failures cost the deposit insurance fund an estimated $88 billion. The fund fell into the red in 2009. But with failures slowing, the fund's balance turned positive in the second quarter of last year. By June 30, it stood at $22.7 billion, up from $15.3 billion at the end of March.

The FDIC expects bank failures from 2012 through 2016 to cost $10 billion.