UPDATE:US Regulators Close Bradford Bank,82nd To Fail This Year

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

The Federal Deposit Insurance Corp. was named receiver of Bradford, the 82nd U.S. bank to fail this year.

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.

The FDIC expects the closure to cost its deposit insurance fund about $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 to just $10.4 billion at the end of June, the lowest level since the S&L crisis.

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

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