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Three U.S. Banks Close, Bringing Failure Toll This Year to 98

• Bloomberg
 

Jennings State Bank of Spring Grove, Minnesota, and Warren Bank of Warren, Michigan, were closed by state regulators and the Federal Deposit Insurance Corp. was named receiver, the agency said yesterday in statements on itsWeb site. Southern Colorado National Bank of Pueblo was closed by the Office of the Comptroller of the Currency, the FDIC said.

“Deposits will continue to be insured by the FDIC,” the agency said. “There is no need for customers to change their banking relationship to retain their deposit insurance coverage.”

Regulators this year have closed the most banks since the savings-and-loan crisis of the early 1990s as lenders struggle with mounting losses on real-estate loans. U.S. job losses accelerated last month as the unemployment rate climbed to the highest level since 1983.

U.S. payrolls dropped by 263,000 in September, exceeding the median forecast in a Bloomberg survey, the Labor Department said yesterday. The jobless rate rose to 9.8 percent from 9.7 percent in August, while working hours matched a record low.

The FDIC deposit-insurance fund has been depleted by 120 bank failures in the past two years. The agency proposed asking banks to prepay three years of premiums to raise $45 billion. Yesterday’s failures cost the fund $293.3 million.

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