WASHINGTON, June 19 (Reuters) - Bank regulators closed two small banks on Friday, bringing total bank failures to 39 this year as the recession and deliquent loans erode the health of financial institutions.

The Federal Deposit Insurance Corp said Cooperative Bank of Wilmington, North Carolina had $970 million in assets and $774 million in deposits. The failure is expected to cost the FDIC deposit insurance fund an estimated $217 million.

First Bank of Troy, North Carolina will purchase all the deposits, except about $57 million in brokered deposits. The FDIC said it will pay the brokers directly for the amount of their funds.

Cooperative Bank's 24 branches will reopen on Monday as branches of First Bank.

The FDIC also announced the failure of Southern Community Bank of Fayetteville, Georgia, which had $377 million in assets and $307 million in deposits. The failure is expected to cost the FDIC deposit insurance fund an estimated $114 million.

United Community Bank of Blairsville, Georgia, agreed to assume the insured deposits of Southern Community Bank, whose five branches will reopen on Monday as branches of United Community Bank.

Customers can access their money over the weekend by check, teller machine or debit card, the FDIC said.

In 2008, 25 U.S. banks were seized by officials, up from three in 2007.

During the current financial crisis, Seattle-based lender Washington Mutual became the biggest bank to fail in U.S. history. It was closed in September while suffering from losses from soured mortgages and liquidity problems.