WASHINGTON - UNITED States regulators took over two banks on Friday and sold them to Mutual of Omaha Bank, the sixth and seventh bank failures this year as financial institutions struggle with a housing bust and credit crunch.

Two weeks after the Federal Deposit Insurance Corp seized IndyMac Bancorp, the Office of the Comptroller of the Currency said it closed First National Bank of Nevada and First Heritage Bank NA of California.

First National, characterized as undercapitalised, had total assets of US$3.4 billion (S$4.6 billion) and US$3 billion in deposits. First Heritage, described as critically undercapitalised, had assets of US$254 million and US$233 million in deposits, regulators said.

The FDIC said the 28 offices of the two banks will reopen on Monday as Mutual of Omaha Bank. Over the weekend, customers can access their money by writing checks, using automatic teller machines or debit cards.

Mutual of Omaha Bank currently has more than US$750 million in assets and operates 14 retail branches in Nebraska and Colorado with commercial lending offices in Dallas and Des Moines, Iowa, the FDIC said.

It is a subsidiary of Mutual of Omaha, a 99-year-old insurance and financial services company with more than US$19 billion in total assets.

Top banking regulators have warned of additional insolvencies this year and next, but for now do not expect failures the size of IndyMac, which had US$32 billion in assets and US$19 billion in total deposits at the end of March.

IndyMac, the third largest US bank failure, was regulated by the Office of Thrift Supervision and is expected to deplete the FDIC's insurance fund by between US$4 billion and US$8 billion.

IndyMac is being run by the FDIC while the agency looks to sell its assets.

The FDIC oversees an industry-funded reserve of about US$53 billion used to insure up to US$100,000 per deposit and US$250,000 per individual retirement account at insured banks.

The agency also has a running tally of problem banks that its examiners closely monitor. At the end of the first quarter, 90 institutions were on the list that is expected to be updated next month.

First Heritage of Newport Beach, California, had three branches with customers comprised mostly of corporations, while First National of Reno, Nevada, had 25 branches. Both were owned by First National Bank Holding of Scottsdale, Arizona.

In addition to assuming all the deposits, Mutual of Omaha Bank will purchase about US$200 million of assets and pay the FDIC a 4.41 premium to assume the deposits.

None of the entities are publicly traded. -- REUTERS