Regulators Close Five Banks; U.S. Bank Failures In 2010 Reach 108 - Update

(RTTNews) - Home Federal Bancorp, Inc. (HOME: News ) announced Friday that its subsidiary, Nampa, Idaho-based Home Federal Bank has acquired the banking operations of Eugene, Oregon-based LibertyBank in a Federal Deposit Insurance Corp. or FDIC, facilitated transaction. The FDIC estimates that the cost to the Deposit Insurance Fund or DIF, will be $115.3 million on this transaction.

The Bank also acquired the operations of Commercial Equipment Lease Corp, a commercial leasing subsidiary of LibertyBank, along with its 15 branches.

This is the second FDIC-assisted transaction for Home Federal Bank following its acquisition of the banking operations of Prineville, Oregon-based Community First Bank in August. The total assets of Home Federal is expected to increase 80% to about $1.5 billion before adjustments, after the acquisition.

Home Federal Bank acquired the assets of LibertyBank at a discount of $29.9 million and the deposit liabilities at a deposit premium of 1.0%. The purchased loans, excluding consumer and deposit secured loans, and real estate owned are covered by a loss share agreement between the FDIC and Home Federal Bank, with the FDIC agreeing to cover 80% of the losses on the disposition of the loans and real estate owned.

The acquisition by Home Federal Bank includes about $387 million of assets, including $94 million of cash and securities and $264 million of loans. Deposits assumed in the acquisition total about $689 million. The Bank anticipates an additional cash settlement of approximately $300 million due to the assumption of net liabilities.

The acquisition is currently expected to deepen Home Federal Bank's presence in in Central Oregon, and its expansion into Lane, Josephine, Jackson, and Multnomah counties in Oregon.

Separately, Heritage Financial Corp. (HFWA: News ) announced that its subsidiary, Heritage Bank, has acquired the banking operations of Longview, Washington-based Cowlitz Bank in another FDIC-facilitated transaction. The FDIC estimates that the cost to the DIF will be $68.9 million on this transaction.

The FDIC and Heritage Bank entered into a modified whole bank loss-share transaction to acquire about $280 million of Cowlitz Bank's assets and about $350 million in deposits, but excluded non-performing loans, other real estate owned and most brokered deposits from the transaction. As a result, Heritage Bank purchased only performing loans in the about amount of $152 million, which are subject to 80% loss coverage by the FDIC.

Earlier in the day, regulators on Friday closed two banks in Florida and one bank in Georgia.

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