U.S. regulators on Friday closed two banking subsidiaries of Irwin Financial Corp, bringing the total of U.S. bank failures this year to 94.
The Federal Deposit Insurance Corp said First Financial Bank of Ohio will assume the deposits of Irwin Union Bank and Trust Company and of Irwin Union Bank.
Irwin Financial Corp said earlier this week it had no realistic prospect of boosting its capital to levels demanded by a U.S. regulatory cease and desist order.
The FDIC said Irwin Union B&T Co had total assets of $2.7 billion and total deposits of about $2.1 billion. Irwin Union Bank had total assets of $493 million and total deposits of about $441 million.
The failure of the two banks is expected to cost the FDIC's dwindling insurance fund $850 million, the agency said.
The FDIC is grappling with a sharp increase in bank failures as deteriorating loans continue to take their toll on financial institutions.
The failures have whittled the balance of the insurance fund down to $10.4 billion from $45 billion a year ago. The FDIC is careful to note that it has $42 billion in reserves to handle failures over the next year.
The two banks that failed on Friday had 27 locations between them and will reopen during their normal business hours beginning Saturday as branches of First Financial Bank.
The FDIC insures up to $250,000 per account. (Reporting by Karey Wutkowski; editing by Carol Bishopric)