Saturday, January 17, 2009

First local bank failure of the new year

From the FDIC:

Bank of Clark County, Vancouver, Washington, was closed today by the Washington Department of Financial Institutions, and the Federal Deposit Insurance Corporation (FDIC) was named receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Umpqua Bank, Roseburg, Oregon, to assume the insured deposits of the Bank of Clark County.
As of January 13, 2009, Bank of Clark County had total assets of $446.5 million and total deposits of $366.5 million. At the time of closing, there were approximately $39.3 million in uninsured deposits held in approximately 138 accounts that potentially exceeded the insurance limits.
In addition to assuming the failed bank's insured deposits, Umpqua Bank will purchase $30.4 million of assets comprised of cash, cash equivalents, marketable securities and loans secured by deposits. The FDIC will retain the remaining assets for later disposition.
The transaction is the least costly resolution option, and the FDIC estimates the cost to its Deposit Insurance Fund will be between $120 and $145 million. Bank of Clark County is the second FDIC-insured institution to be closed this year. Bank of Clark County is the first bank to fail in Washington since Emerald City Bank, Seattle, on July 2, 1993.
From the Oregonian:
The unraveling of the nation's financial sector hit Southwest Washington with bitter impact Friday when the Washington Department of Financial Institutions shut down the Bank of Clark County.
Bank customers could lose nearly $40 million in deposits in the shutdown, as some accounts exceeded the $250,000 FDIC insurance.
The bank was heavily exposed to the faltering real estate sector through loans to builders and developers. Construction and development loans accounted for more than 36 percent of the bank's total portfolio.