DOW JONES NEWSWIRES
For the second time in as many weeks, U.S. regulators Friday
announced the failure of a Washington state bank and arranged for
Columbia Banking System Inc.'s (COLB) operating subsidiary to take
it over.
The Federal Deposit Insurance Corp. said First Heritage Bank of
Snohomish, Wash., failed Friday. Like Summit Bank a week earlier,
First Heritage will be absorbed by Columbia State Bank in Tacoma,
Wash. Columbia Banking System is the holding company of Columbia
Bank. Summit and First Heritage are the only Washington banks to
fail so far in 2011.
But First Heritage brings the total number of failures in the
U.S. to 44 this year. The number of banks that failed last year,
157, was the highest since the savings-and-loan crisis ended in
1992, although the total assets at 2010's fallen banks were much
smaller than the total in 2009.
First Heritage Bank's five branches will reopen Tuesday under
the banner of Columbia State Bank following the Memorial Day
holiday. It had about $173.5 million in total assets and $163.3
million in total deposit as of the end of March. Columbia State
Bank agreed to pay the FDIC a premium of 0.75% to assume all of the
deposits and entered a loss-share transaction on $142.2 million of
the assets.
The FDIC estimated that the cost of the failure to the Deposit
Insurance Fund will be $34.9 million.
Depositors of the failed banks will automatically become
depositors of the new banks and deposits will continue to be
insured by the FDIC. The FDIC insures deposits for up to $250,000
per depositor.
-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291;
joan.solsman@dowjones.com