January 24, 2010
FDIC SELLS CRB
Locally owned Columbia River Bank is largest in Oregon to fail
By Rodger Nichols
The Chronicle
What you need to know:
All deposits are insured up to $250,000 by the FDIC
All customers will continue to have access to their money without interruption. ATM machines and online banking services will remain functional.
Checks that were drawn on Columbia River Bank that did not clear before the institution closed will be honored as long as there are sufficient funds in the account.
All interest accrued through Friday, January 22, 2010 will be paid at the same rate. Columbia State Bank will be reviewing rates and cutomers will be notified of any changes.
Automatic direct deposit(s) and/or automatic withdrawal(s) will be transferred automatically to the new bank.
Loan customers should continue to make payments as usual. Loan terms will not change, because they are contractually agreed to in the promissory note. Checks should be made payable as usual and sent to the same address until further notice
The Columbia River Bank website has a link to the FDIC press release about the transfer. |
Just after the close of business at 6 p.m. Friday, regulators closed Columbia River Bank. The Oregon Division of Finance and Corporate Securities appointed the Federal Deposit Insurance Corporation (FDIC) as receiver.
The bank lost $52 million in the first nine months of 2009 and $26.3 million in 2008.
It is by far the largest bank to fail in the state of Oregon since the financial crisis began.
The FDIC immediately announced it had sold the bank to Columbia State Bank, based in Tacoma, Wash.
“The one thing about these bank failures that people need to remember is that it’s basically a nonevent for insured
depositors,” said FDIC spokesman Greg Hernandez in a telephone interview Friday night. “If you’re under the $250,000 limit, you don’t have to worry about anything. The only thing you’ll notice is the bank will have a new name.”
Columbia State Bank will assume all of the deposits of Columbia River Bank.
The 21 branches of Columbia River Bank were scheduled to reopen during their normal business hours Saturday as branches of Columbia State Bank.
“Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage, said an FDIC press release. “Customers should continue to use their existing branch until they receive notice from Columbia State Bank that it has completed systems changes to allow other Columbia State Bank branches to process their accounts as well.”
That release added that there would be no interruption in service
“Over the weekend, depositors of Columbia River Bank can access their money by writing checks or using ATM or debit cards,” it said. “Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.”
According to the Columbia State Bank website, the parent company, Columbia Banking System has 52 banking offices in Pierce, King, Cowlitz, Kitsap, Thurston, Whatcom and Clark counties in Washington State, and Clackamas, Clatsop, Tillamook and Multnomah counties in Oregon.
“We are very pleased to warmly welcome former Columbia River Bank customers into our extended Columbia State Bank network,” said Melanie J. Dressel, President and CEO of Columbia Banking System, parent company of Columbia State Bank. “Branches will open under new ownership; however, customers will be able to bank as usual during regular business hours, and their deposits are safe, available and remain FDIC insured. We look forward to working with the Columbia River team during this transition and are committed to serving the communities that Columbia River Bank has long embraced.”
As part of the transaction Columbia Banking System will acquire approximately $1.0 billion in assets and approximately $980 million in deposits located in Columbia River Bank’s 21 branches in Oregon and Washington.
Columbia River Bank’s loan portfolio of approximately $700 million will be subject to a loss-sharing agreement with the FDIC.
“What that means is the FDIC will share with that particular bank any of the losses it incurs in taking over assets, which include loans,” said the FDIC’s Hernandez. The FDIC will cover 80 percent of any losses Columbia State Bank has from taking over Columbia River Bank loans that go bad.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $172.5 million. Columbia State Bank’s acquisition of all the deposits was the “least costly” resolution for the FDIC’s DIF compared to all alternatives, according to Friday’s news release.
Columbia River Bank is the ninth FDIC-insured institution to fail in the nation this year, and the first in Oregon. The last FDIC-insured institution closed in the state was Community First Bank in Prineville, on Aug. 7, 2009.
Shares of Columbia River Bancorp, the parent company of Columbia River Bank closed down 36 cents Friday at $ 1.17, a 23.5 percent drop.
Customers who have questions about the transaction can call the FDIC toll-free at 1-800-523-0640. That number will be operational Saturday from 9 a.m. to 6 p.m., PST; Sunday from noon to 6 p.m., PST; and thereafter from 8 a.m. to 8 p.m., PST. Interested parties also can visit the FDIC’s Web site at http://www.fdic.gov/bank/individual/failed/columbiariver.html.
Columbia Banking System's management will review the acquisition on a web conference call scheduled for Monday, January 25, 2010 at 1:00 p.m. PST (4:00 p.m. EST).
1. Interested parties may view the slide portion of this online review by going to the following page on the Columbia Bank Website:
https://columbiabank.webex.com/columbiabank/k2/j.php?ED=131503237&UID=1113065282&RT=MiM0
2. Enter your name and email address.
3. Enter the session password: This session does not require a password.
4. Click "Join Now".
5. Follow the instructions that appear on your screen.
Session number: 963 883 456
In order to hear management's audio portion of the call, participants will also need to:
Call-in toll-free number (US/Canada):1-866-699-3239
Access code: 963 883 456
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