WASHINGTON, June 26 (Reuters) - Bank regulators closed Neighborhood Community Bank, of Newnan, Georgia, on Friday, the 42nd U.S. bank to fail this year as the struggling economy and falling home prices take their toll on financial institutions.

The Federal Deposit Insurance Corp said Neighborhood Community Bank had $221.6 million in assets and $191.3 million in deposits. The failure is expected to cost the FDIC deposit insurance fund an estimated $66.7 million.

CharterBank, of West Point, Georgia, agreed to assume the insured deposits and $209.6 million of the assets of Neighborhood Community Bank, whose four offices will reopen as branches of CharterBank. (Reporting by Charles Abbott; editing by Andre Grenon)