FDIC-insured bank failure totals continue to rise around the US, with the latest two bank failures coming in Nevada and Washington, with Carson River Community Bank and Rainier Pacific Bank.
Carson River Community Bank, Carson City, Nevada
On Friday, February 26, 2010, Carson River Community Bank, the first bank institution to be closed in Nevada this year, shuttered its doors via the actions of the Nevada Department of Business and Industry and the Federal Deposit Insurance Corporation (FDIC). Heritage Bank of Nevada, located in Reno has assumed ownership of the approximate $38 million in deposits of Carson River Community Bank, and its single branch location.
Carson River Community Bank had approximately $51 million in total assets and $50 million in total deposits by December 31, 2009. Heritage Bank of Nevada did not pay the FDIC a premium to assume all of the deposits of Carson River Community Bank. The FDIC estimates the cost to the Deposit Insurance Fund (DIF) will be $7.9 million. Carson River Community Bank is the 21st FDIC-insured institution to fail in the nation this year.
Distressed Pro’s BankProspector shows that Carson River Community Bank reported capital adequacy of 2% with nonaccrual assets of $7 million, an OREO balance of approximately $2 million, and non-current distressed totals over 19%. Carson River’s failure stemmed largely from its almost 50% non-current portfolio of construction loans, totaling approximately $4.4 million.
Rainier Pacific Bank, Tacoma, Washington
The FDIC and the Washington Department of Financial Institution moved forward with closing Rainier Pacific Bank of Tacoma, Washington, the fourth FDIC-insured banking institution to be closed in 2010. Umpqua Bank of Roseburg, Oregon has assumed all deposits and clients of the failed bank and its 14 branch locations.
Umpqua Bank will pay the FDIC a premium of 1.04 percent to assume all of the deposits of Rainier Pacific Bank. Rainier Pacific held approximately $717.8 million in total assets and $446.2 million in total deposits by December 31, 2009. The FDIC estimates that the cost to the DIF will be $95.2 million. Rainier Pacific Bank is the 22nd FDIC-insured institution to fail in the nation this year, and the fourth in Washington.
Bank Prospector shows that Rainier Pacific carried capital adequacy and leverage ratios of 2% – 3%. As with Carson River, Rainier was crippled by construction loan nonaccrual totals over $15 million, OREO levels higher than $11 million, and non-current construction loan portfolio totals of 33%.