U.S. regulators seized three more troubled banks on Friday, including TierOne Bank of Lincoln, Nebraska, ticking up the total so far this year to 81 failures.

TierOne was the fourth-largest bank in Nebraska with approximately $2.8 billion in assets as of March 31. It lost $300 million last year on real estate-related loans in Florida, Nevada and other states.

Great Western Bank, of Sioux Falls, South Dakota, agreed to purchase TierOne and assume its $2.2 billion in deposits. TierOne's 69 branch offices will reopen on Saturday as branches of Great Western, said the Federal Deposit Insurance Corp.

Regulators also closed two small banks in Mississippi and Illinois on Friday.

Small banks are collapsing at a rapid pace in the wake of the credit crisis. Failures are expected to peak this year in the third quarter, and outpace the 140 that failed last year.

First National Bank, of Rosedale, Mississippi, with $60.4 million in assets, was closed by regulators on Friday. Its office will reopen on Monday as a branch of The Jefferson Bank, of Fayette, Mississippi, which assumed its $63.5 million in deposits.

The FDIC approved the payout of insured deposits from Arcola Homestead Savings Bank, of Arcola, Illinois, after it was unable to find a bank to take over its operations. State regulators closed the bank, which had $17 million in assets and $18.1 million in total deposits.

Despite the woes in the community bank industry, the number of failures has not reached the levels of the savings and loan crisis, when 534 institutions were seized in 1989 alone.

In the current crisis, the problems dogging the banking industry have migrated from home mortgages to commercial real estate, especially for community banks that tend to have higher concentrations of commercial real estate loans.

However, the bank industry is showing solid signs of recovery.

FDIC Chairman Sheila Bair said at the agency's quarterly briefing on May 20 more banks in the past several weeks had been able to raise capital to boost their balance sheets or acquire other banks.

She also said the FDIC is seeing higher bids in failed bank auctions, meaning other firms are finding the assets of troubled banks more desirable.

(Reporting by Charles Abbott; Editing by Gary Hill)

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