Silver Falls Bank becomes 14th American bank to fail in 2009
23 Feb 2009
Oregon regulators seized Silver Falls Bank, the 14th US bank shuttered this year, as the worst financial crisis in a more than half a century further tightens access to credit and pushes foreclosures higher.
Silver Falls, with $131.4 million in assets and $116.3 million in deposits, was shut by the Oregon Department of Consumer and Business Services and the Federal Deposit Insurance Corp. (FDIC) was named receiver, the FDIC said yesterday in a statement. Citizens Bank of Corvallis, Oregon, will assume deposits from Silver Falls. The Silverton-based bank's three offices will open on 23 February as branches of Citizens Bank.
''There is no need for customers to change their banking relationship to retain their deposit insurance coverage,'' the FDIC said in the statement.
Regulators have closed eight banks in February, the most for any month since 1993. The FDIC shuttered 25 banks in 2008, including Washington Mutual Inc., the biggest US bank to fail last year, and IndyMac Bank Inc., the second biggest. Last week, Loup City, Nebraska-based Sherman County Bank, Cape Coral, Florida-based Riverside Bank of the Gulf Coast, Pittsfield, Illinois-based Corn Belt Bank and Trust Company, and Beaverton, Oregon-based Pinnacle Bank were closed by regulators. (See: Federal Reserve seizes WaMu; auctions it to JPMorgan for $1.9 billion / Another US bank fails: Regulators seize IndyMac Bancorp assets and Nearly 1,000 small US banks seen closing in 3-5 years
Silver Falls raised $525,000 from a stock sale last month, the Oregon regulator said. Funds were held in an escrow account and are being returned to the investors. Citizens Bank will buy about $13 million in assets, the FDIC said. The failure will cost the deposit insurance fund, supported by fees on banks, about $50 million, the FDIC said.
On 16 December, the FDIC doubled premiums it charges banks to replenish its reserves, which had $34.6 billion as of the third quarter. Bank failures through 2013 may cost the funds more than the $40 billion, according to the Washington-based agency that oversees 8,384 institutions with $13.6 trillion in assets.
The FDIC classified 171 banks as ''problem'' in the third quarter, a 46 per cent jump from the second quarter, and said industry earnings fell 94 per cent to $1.73 billion from the previous year. The agency doesn't identify problem banks by name. A new report will be released on 26 February.
