Federal regulators close Oregon-based bank, ninth U.S. bank failure of 2010January 23rd, 2010 - 3:48 pm ICT by BNO News
THE DALLES, OREGON (BNO NEWS) — Federal regulators on Friday closed the Columbia River Bank in The Dalles, Oregon, marking the ninth U.S. bank failure of 2010 following an economic turbulent year that saw more than one hundred U.S. banks fail.
The Columbia River Bank was closed by the Oregon Division of Finance and Corporate Securities after its regular closing time on Friday. The Federal Deposit Insurance Corporation (FDIC) was appointed as receiver following its closure, who immediately entered into a purchase and assumption agreement with the Washington-based Columbia State Bank to assume all of the failed bank’s deposits.
The Columbia River Bank was founded in 1977 by a group of businessmen and had 21 branches when it failed on Friday.
Most, if not all customers, should see no or little service disruptions despite the closure of the institution. On Saturday, all 21 branches of the Columbia River Bank will reopen during their normal business hours as branches of Columbia State Bank.
All of the failed bank’s services, including checks, ATM and debit cards, will remain active. “Checks drawn on the bank will continue to be processed,” the FDIC said in a statement. “Loan customers should continue to make their payments as usual.”
As of September of last year, the Columbia River Bank had approximately $1.1 billion in total assets and $1.0 billion in total deposits. Columbia State Bank paid the FDIC a premium of 1.0 percent to assume Columbia River Bank’s deposits, the FDIC said. “In addition to assuming all of the deposits of the failed bank, Columbia State Bank agreed to purchase essentially all of the assets.”
The FDIC and Columbia State Bank entered into a loss-share transaction on approximately $697.4 million of Columbia River Bank’s assets. Columbia State Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers.
The FDIC said it estimates that the cost to the Deposit Insurance Fund (DIF) will be $172.5 million. It said Columbia State Bank’s acquisition of the deposits was the “least costly” resolution compared to other alternatives.
Friday’s closure was not only the ninth U.S. bank failure of 2010 but was also Oregon’s first bank failure since August 7, 2009. Regulators then closed the Community First Bank in Prineville.
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