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44th Bank Failure of the Year: First Heritage Bank in Washington State

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Just one bank failed on Friday. First Heritage Bank in Snohomish, Washington became the 44th bank failure of the year. It was the second bank to fail this year in Washington State. The first one was just last week.

The FDIC arranged for Columbia State Bank to acquire First Heritage. Columbia State was the same bank that acquired last week's failed Washington State bank. Columbia State Bank agreed to assume all deposits including brokered deposits. That's different than last week when certain brokered deposits were excluded in the assumption. One thing that's the same is that Columbia State Bank has already admitted that CD rates will be going down. Here's what was stated in Columbia State Bank's FAQs

Your maturity date on your CD(s) will remain the same. However, we will be changing the interest rate. New rates for your existing interest bearing deposit account(s) and CD(s) will be mailed to you in the coming week. You may withdraw your CD funds without an early withdrawal penalty until you enter into a new deposit agreement with Columbia Bank.

Technically, they didn't admit that the rates were going down, but I think the chance that the rates will be going up is about as high as the chance that I'll win the lottery (which I don't play).

Below is a summary of today's bank failure:

44th Bank Failure of 2011 (2nd in Washington)

  • FDIC Press Release
  • Closed Bank: First Heritage Bank, Snohomish, WA
  • Size: 5 branches, $173.5 million in assets, $163.3 million in deposits
  • Acquiring Bank: Columbia State Bank, Tacoma, WA
  • Possible Uninsured Deposits: All deposit accounts, including brokered deposits, have been assumed by Columbia State Bank
  • Rate Changes: we will be changing the interest rate. New rates for your existing interest bearing deposit account(s) and CD(s) will be mailed to you in the coming week. (bank's FAQs)
  • Estimated Cost to Deposit Insurance Fund: $34.9 million
  • Enforcement Action: FDIC 4/26/10 Consent Order, FDIC 2/24/11 PCA
  • Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 474.67% at DepositAccounts.com (see financial rating note)

Financial Ratings Notes: 0 star is lowest at BauerFinancial, 1 star is lowest at Bankrate.com & DepositAccounts.com, Texas Ratios over 100% is considered at risk. Ratings are based on December 2010 data except at DepositAccounts.com which now includes data from March 2011.

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