Friday, U.S. Regulators closed five banks bringing the bank failure number to nine in 2010. Columbia River Bank of Oregon; Evergreen Bank of Washington; Charter Bank of New Mexico; Bank of Leeton of Missouri; and Premier American Bank of Florida have been closed.
Columbia River Bank
The Dalles, Oregon-based Columbia River Bank, a wholly owned subsidiary of Columbia Bancorp (CBBO) was closed by the Oregon Division of Finance and Corporate Securities, which appointed the Federal Deposit Insurance Corp., or FDIC as receiver. Columbia Banking System Inc.'s (COLB) Subsidiary Columbia State Bank agreed to assume all of the deposits of the failed bank from FDIC, through a purchase and assumption agreement. In 2010, Columbia River Bank is the first bank to fail in Oregon.
The agreement entails Columbia State Bank to pay the FDIC a premium of 1.0% to assume all of the deposits of Columbia River Bank. It also entered into a loss-share transaction on $697.4 million of Columbia River Bank's assets. As of September 30, 2009, Columbia River Bank had about $1.1 billion in total assets and $1.0 billion in total deposits. From January 23, the former Columbia River Bank locations will reopen as branches of Columbia State Bank.
The FDIC estimates that the cost to the Deposit Insurance Fund, or DIF to be $172.5 million.
Evergreen Bank
The Seattle, Washington-based Evergreen Bank, was closed, making it the eighth FDIC-insured institution to fail in U.S this year, and the second in Washington. The Washington Department of Financial Institutions appointed the FDIC as receiver. Umpqua Bank, a subsidiary of Umpqua Holdings Corp. (UMPQ) assumed all of the deposits of Evergreen Bank. As of September 30, 2009, Evergreen Bank had approximately $488.5 million in total assets and $439.4 million in total deposits.
As part of this transaction, the FDIC will acquire a cash participant instrument, which would be additional consideration for the transaction. Umpqua Bank would pay 1% premium to FDIC to assume all of the deposits of the failed bank. Umpqua Bank agreed to purchase essentially all of the assets. The cost to the DIF of FDIC is expected to be around $64.2 million.
On January 25, the former Evergreen Bank locations will reopen as branches of Umpqua Bank.
"Umpqua Bank has always been committed to the financial health of the communities we serve. As one of the nation's strongest community banks, Umpqua is well positioned to assume the deposits and loans of EvergreenBank, and we will work quickly to make this transition as smooth as possible for customers and employees," said Ray Davis, Umpqua's president and CEO.
Charter Bank
The seventh FDIC-insured institution to fail this year and the first in New Mexico is Charter Bank, which was closed by the state regulatory authority.
The FDIC entered into a purchase and assumption agreement with Charter Bank, a newly-chartered federal savings bank and a subsidiary of Beal Financial Corp., Plano, Texas, to assume all of the deposits of Charter Bank.
Effective Monday, January 25, the former Charter Bank, Santa Fe, New Mexico locations will reopen as branches of Charter Bank, Albuquerque, New Mexico. As of September 30, 2009, Charter Bank had approximately $1.2 billion in total assets and $851.5 million in total deposits. Charter Bank did not pay the FDIC a premium for the deposits of Charter Bank. Further, Charter Bank entered into a loss-share transaction on $805.5 million of Charter Bank's assets, with the FDIC. The FDIC estimates cost to the DIF to be $201.9 million.
Bank of Leeton
The Leeton, Missouri-based Bank of Leeton, was closed by the state regulatory authority and appointed the FDIC as the receiver. In order to protect the depositors the FDIC entered into a purchase and assumption agreement with Sunflower Bank, National Association, Salina, Kansas, to assume all of the deposits of Bank of Leeton.
The FDIC as receiver will retain most of the assets from Bank of Leeton for later disposition. Sunflower Bank will pay the FDIC a premium of 0.59% to assume all of the deposits of Bank of Leeton. The sole branch of Bank of Leeton will reopen on Saturday as a branch of Sunflower Bank, N.A.
As of December 31, 2009, Bank of Leeton had approximately $20.1 million in total assets and $20.4 million in total deposits. The sixth FDIC-insured institutional failure in the U.S. since 2010, would cost nearly $8.1 million to the DIF.
Premier American Bank
The Miami, Florida-based Premier American Bank, is the first FDIC-insured bank to fail in Florida in 2010. Premier American Bank, National Association, Miami, Florida, a newly-chartered national institution, and a unit of Bond Street Holdings, LLC, Naples, Florida, agreed with the FDIC to assume all of the deposits of Premier American Bank. The four branches of Premier American Bank will reopen as branches of Premier American Bank, N.A, effective Monday.
As of September 30, 2009, Premier American Bank had approximately $350.9 million in total assets and $326.3 million in total deposits. The FDIC estimates that the cost to the DIF to be $85 million.
Premier American Bank did not pay the FDIC any premium for the deposits of Premier American Bank. Also, it agreed to purchase essentially all of the assets of the failed bank. The FDIC and acquiring institution entered into a loss-share transaction on $300 million of Premier American Bank's assets.
Friday, COLB, CBBO and UMPQ closed regular trading at $18.15, $1.17 and $13.69, respectively, on the Nasdaq.
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