While the New Year didn’t start off with a bang as far as bank failures go, Horizon Banks’ failure on Friday is the first of what will probably be close to 200 bank failures in 2010; far exceeding the bank failures of 2009. This doesn’t include failed credit unions, which when added to 2009 bank failures came to 171 total. Of those, 140 were banks.
Horizon Bank, based in Bellingham, Washington is the first bank failure of 2010, as it was shuttered by the Washington State Department of Financial Institutions.
Immediately acquiring the failed bank was Washington Federal Savings & Loan Association after the Federal Deposit Insurance Corporation (FDIC) was appointed as receiver of the bank, whereby they then entered into a purchase and assumption agreement with Washington Federal Savings and Loan Association, which is based in Seattle, Washington. Washington Federal will take over all the deposits at Horizon, as well as acquire basically all the $1.3 billion in assets of the company.
The quarter ending September 30, 2009, showed Horizon bank with about $1.3 billion in overall assets and $1.1 billion in deposits.
This first bank closure for the year will cost close to $539.1 million for the Federal Deposit Insurance Corporation’s Deposit Insurance Fund.
The first credit union failure of the year also happened on Friday, as Kern Central Credit Union of Bakersfield, California was closed by the National Credit Union Administration (NCUA).
After being appointed as the liquidating agent by the California Department of Financial Institutions (DFI), the NCUA turned around and entered into an agreement with Self-Help Federal Credit Union (Self-Help) of Durham, North Carolina, to take over all the liabilities of the credit union and to assume all its assets.
Kern Central had 3 branches, which Self-Help will continue to operate.
At the closing of Kern Central, they held about $34.9 million in assets, with close to 8,400 members. Self-Help was a little over twice that size, holding about $75.2 million in assets while service 15,000 members.