3rd UPDATE: Regulators Close Banks In Calif., Md., Minn.

Federal and state regulators Friday shuttered banks in California, Maryland and Minnesota, bringing the number of failed banks nationwide this year to 84.

Affinity Bank of Ventura, Calif., was closed by the state Department of Financial Institutions, with the banking operations of PacWest Bancorp (PACW) assuming its $922 million in deposits. PacWest unit Pacific Western Bank also agreed to buy most of Affinity's $1 billion in assets.

U.S. regulators also closed Bradford Bank of Baltimore, while announcing an agreement with Manufacturers & Traders Trust Co. (MTB) to assume all deposits of the failed institution.

Meanwhile, Mainstreet Bank of Forest Lake, Minn., was closed by the state's Department of Commerce, with Stillwater-based Central Bank taking over the deposits.

The Federal Deposit Insurance Corp., which was named receiver of all three banks, estimated the agency's deposit insurance fund would take a hit of $254 million from Affinity's failure. It expects Mainstreet's closure to cost the fund $95 million and put Bradford's cost at $97 million.

Bank failures have reached levels not seen since the savings-and-loan crisis of the early 1990s as the economic slump continues to take its toll on the financial sector. In 2008, regulators shut down 25 banks.

The closings have cost the FDIC about $19 billion, and the deposit insurance fund that protects more than $4.5 trillion in U.S. bank deposits is quickly running out. The FDIC said Thursday that the fund held just $10.4 billion at the end of June, the lowest level since the S&L crisis.

Meanwhile, the agency added another 111 names in the second quarter to its list of "problem" banks considered at higher risk of failure, bringing the total to 416, despite signs of improvement in the broader economy.

Bradford's nine branches will reopen Monday as branches of M&T, of Buffalo, N.Y. In addition to assuming all $383 million of Bradford's deposits, M&T also agreed to purchase essentially all of the failed bank's assets, which totaled $452 million.

The FDIC and M&T entered into a loss-share transaction on about $338 million in assets, in which M&T will share in the losses on the asset pools covered under the agreement.

Mainstreet's eight branches will reopen Saturday as operations of Central Bank. Central Bank will pay the FDIC a premium of 0.10% to assume the $434 million in deposits. It also entered into a loss-share transaction with the FDIC on about $268 million of Mainstreet's $459 million of assets.

Pacific Western entered into a loss-share agreement with the FDIC on about $934 million of Affinity's assets. Branches in San Francisco and San Mateo will reopen tomorrow under the Pacific Western name, with the remaining branches reopening Monday.

-By Tom Barkley, Dow Jones Newswires; 202-862-9275; [e-mail]