Saturday, February 14, 2009

Local bank failure # 2: Pinnacle Bank

From the FDIC:

Pinnacle Bank, Beaverton, Oregon, was closed today by the Oregon Division of Finance and Corporate Securities, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Washington Trust Bank, Spokane, Washington, to assume all of the deposits of Pinnacle Bank.
Due to the observance of Presidents' Day on Monday, Pinnacle Bank's sole office will reopen as a branch of Washington Trust Bank on Tuesday. Depositors of Pinnacle Bank will automatically become depositors of Washington Trust Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage.
As of December 31, 2008, Pinnacle Bank had total assets of approximately $73 million and total deposits of $64 million. In addition to assuming all of the deposits of the failed bank, including those from brokers, Washington Trust Bank agreed to purchase
approximately $72 million in assets at a discount of $7.6 million. The FDIC will retain the remaining assets for later disposition.

The FDIC estimates that the cost to the Deposit Insurance Fund will be $12.1 million. Washington Trust Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's Deposit Insurance Fund compared to alternatives. Pinnacle Bank is the thirteenth FDIC-insured institution to fail in the nation this year, and the first in Oregon since Far West, Federal Savings Bank, Portland, was closed on May 23, 1991.