Silver Falls Bank Closed; 14th Bank Failure of 2009
Silverton, Ore.-based Silver Falls Bank was shut down Friday by the Oregon Department of Consumer and Business Services, which appointed the Federal Deposit Insurance Corporation as receiver -- marking the 14th bank failure this year. The FDIC then entered into a purchase and assumption agreement with Citizens Bank, out of Corvallis, Ore., to assume all of the deposits of Silver Falls Bank. The three branches of Silver Falls Bank reopened on Monday as branches of Citizens Bank, according to the FDIC. Depositors of Silver Falls Bank will automatically become depositors of Citizens Bank. As of February 9, 2009, Silver Falls Bank had total assets of approximately $131.4 million and total deposits of $116.3 million. Citizens Bank did not pay a premium to acquire the deposits of Silver Falls Bank. In addition to acquiring all of the failed banks deposits, including those from brokers, Citizens Bank agreed to purchase approximately $13 million in assets comprised of cash, cash equivalents, securities, overdraft loans, and deposit secured loans. The FDIC will retain any remaining assets for later disposition. The FDIC estimates that the cost to the Deposit Insurance Fund will be $50 million. The Citizens Bank acquisition of all the deposits of Silver Falls Bank was the "least costly" resolution for the FDIC's Deposit Insurance Fund compared to alternatives, the FDIC said. Silver Falls Bank is the 39th bank to sail since the beginning of the credit crisis.The last bank to fail in Oregon was Pinnacle Bank, Beaverton, on February 13, 2009. Write to Kelly Curran at firstname.lastname@example.org. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.