US regulators shut down Columbian Bank and Trust Co in Kansas, which was struggling with losses on soured real estate loans. It was the ninth failure this year of a federally insured bank.
The Federal Deposit Insurance Corp. was appointed receiver of the bank, located in Topeka, Kansas.
It had $752 million (Dh2.76 billion) in assets and $622m in deposits as of June 30.
The FDIC did not give a reason for the closure, but Columbian reported $92m in delinquent loans in the second quarter, citing a "volatile real estate market."
The bank has set aside $9.2m for loan losses in the first quarter.
Columbian has said that five borrowers represented nearly half the $92m in problem loans. Many of its troubled loans were in construction and development.
The FDIC said the bank's deposits will be assumed by Citizens Bank and Trust of Chillicothe, Missouri. Its nine offices will reopen Monday as branches of Citizens Bank.
Depositors of Columbian Bank will continue to have full access to their deposits, the agency said.