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Three More Banks Fail

WASHINGTON ( TheStreet) -- State regulators closed banks in Michigan, Minnesota and Colorado Friday, bringing the total number of failed banks and thrifts this year to 98.

The Michigan Office of Financial and Insurance Regulation shuttered Warren Bank of Warren, Mich. and appointed the Federal Deposit Insurance Corporation receiver. The FDIC then sold the failed institution's branches and deposits to Huntington National Bank, the main subsidiary of Huntington Bancshares (HBAN - Get Report).

Minnesota regulators took over Jennings State Bank of Spring Grove. The FDIC was appointed receiver and sold the the failed bank's deposits and nearly all of its assets to Central Bank of Stillwater, Minn.

Later on Friday the Office of the Comptroller of the Currency shut down Southern Colorado National Bank of Pueblo and appointed the FDIC receiver. The FDIC sold the failed bank's deposits and almost all of its assets to Legacy Bank of Wiley, Colo.

All three failed banks had been assigned E-minus (Very Weak) financial strength ratings by Ratings.

The three failed institutions were also included in's list of undercapitalized banks and thrifts, based on second-quarter data.

They were also among 89 institutions on a previous list published by in late May. Out of that list, 45 banks and thrifts have failed.

Warren Bank

Warren Bank had been considered undercapitalized since the end of 2008, when it reported a tier 1 leverage ratio of 4.75% and a total risk-based capital ratio of 7.44%. These ratios need to be at least 4% and 8% for most banks to be considered well-capitialized under regulatory capital guidelines. They need to be 5% and 10% for most institutions to be considered well-capitalized.
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