On Friday, US regulators shut down Horizon Bank of Bellingham, Washington, starting off what, predictions say, could be the peak year for failure of small banks.

As per information shared by the Federal Deposit Insurance Corp, Horizon Bank possessed nearly $1.3 Billion in total assets and $1.1 Billion in total deposits, as of figures calculated on September 30.

The most recent closure of the bank is expected to cost the FDIC's insurance fund a total of $539.1 Million.

All 18 branches of the bank will reopen during their normal business hours starting Saturday as branches of the Washington Federal Savings and Loan Association. All deposits will continue to be insured by the FDIC.

Last year, regulators had closed a total of 140 banks, the highest level recorded since 1992, and this year, it seems that the small banks are all set to suffer more shut downs.

As per FDIC Chairman Sheila Bair, keeping in mind the current banking crisis, it seems that failures will hit their peak in 2010 and then start to fall.