By SCOTT HARRISON

s.harrison@krdo.com

PUEBLO - Federal regulators closed Southern Colorado National Bank Friday night, after it became the fourth bank in Colorado to fail this year.  However, the bank reopened Saturday under new owner Legacy Bank, based in Wiley, Colorado.

Legacy has acquired SCNB's $71 million in assets and deposits.  Officials say the bank will operate as usual, and the Federal Deposit Insurance Corporation will guarantee all deposits up to $250,000.  Legacy assumes control of SCNB branches on Spaulding Avenue in Pueblo and East Spaulding Avenue in Pueblo West.  Legacy already has branches in Colorado Springs, Pueblo, Canon City and Wiley, with plans to open another Pueblo branch.  Legacy was founded in 1907.

According to the FDIC, SCNB had been on a "watch" list since November 2008, and a buyer was never found.  The FDIC cites bad commercial real estate loans for the failure of SCNB.  Legacy stepped in two weeks ago and joined two other banks in bidding for SCNB. 

Legacy officials say few customers have inquired about canceling accounts and withdrawing funds.  There was very little customer traffic Saturday.  A white Legacy sign with a drawing of a bison now covers the SCNB signs on the branch buildings.  A team of about 50 regulators will be in town until Tuesday handling the transition.

SCNB is the 98th U.S. bank to fail this year, the most since 1992.  Experts blame the weak economy and bad loans for the failures.  The trend also is dwindling the FDIC's fund, which has shrunk from $45 billion last year to $10 billion this year.  To restock the fund, the FDIC proposes that banks prepay their deposit insurance premiums for the next three years.