Small Oregon bank becomes 14th bank to fail in '09
NEW YORK -- Regulators on Friday closed Silver Falls Bank in Silverton, Ore. — the 14th federally insured institution to fail this year, and the second based in Oregon.
Silver Falls Bank, a community bank that opened in May 2000, had $131.4 million in assets and $116.3 million in deposits as of Feb. 9. The last Oregon-based bank to close was Beaverton-based Pinnacle Bank last week.
Citizens Bank of Corvallis, Ore., is assuming Silver Falls Bank's deposits. It also is taking over its three branches and buying about $13 million in assets, including cash, securities and overdraft loans.
The Federal Deposit Insurance Corp., appointed receiver of Silver Falls Bank, will retain the bank's remaining assets.
The FDIC estimated that the cost of Silver Falls Bank's failure to the federal deposit insurance fund will be $50 million.
Regular deposit accounts are insured up to $250,000.
The bank failure wave began last year, when 25 U.S. banks were seized by regulators — more than in the previous five years combined. As home prices plunge and layoffs escalate, banks have seen loan defaults soar. And the trend has only been worsening as the recession deepens.
The FDIC has estimated that through 2013, the deposit insurance fund will lose as much as $40 billion, including an $8.9 billion loss from the failure of IndyMac Bank last July. To replenish the fund — which now stands at a five-year low of about $35 billion — the agency has raised the insurance premiums banks and thrifts must pay.
Of the roughly 8,500 federally insured banks and thrifts, the FDIC had 171 on its confidential list of troubled institutions as of Sept. 30. That was a nearly 50% jump from the second quarter and the highest tally since late 1995.
Silver Falls Bank customers with questions can call the FDIC at 800-760-3639.
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