Information provided by FDIC on Failure of Horizon Bank, Bellingham, WA
Horizon Bank, Bellingham, Washington, was closed today by the Washington State Department of Financial Institutions, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver.
The 18 branches of Horizon Bank will reopen as branches of Washington Federal Savings and Loan Association.
As of September 30, 2009, Horizon Bank had approximately $1.3 billion in total assets and $1.1 billion in total deposits. Washington Federal Savings and Loan Association did not pay the FDIC a premium to assume all the deposits the Horizon Bank. In addition to assuming all of the deposits of the failed bank, Washington Federal Savings and Loan Association agreed to purchase essentially all of the assets of the failed bank.
The FDIC and Washington Federal Savings and Loan Association entered into a loss-share transaction on approximately $1.0 billion of Horizon Bank's assets. Washington Federal Savings and Loan Association will share in the losses on the asset pools covered under the loss-share agreement.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $539.1 million. Washington Federal Savings and Loan Association's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to all alternatives. Horizon Bank is the first FDIC-insured institution to fail in the nation this year, and the first in Washington. The last FDIC-insured institution closed in the state was Venture Bank, Lacey, on September 11, 2009.