February 22, 2009
While federal policymakers debate whether or not to "nationalize" the nation's largest banks, smaller banks continue to fail. The Oregon Department of Consumer and Business Services has closed Silver Falls Bank, in Silberton, Oregon, and appointed the Federal Deposit Insurance Corporation as receiver.
It is the 14th U.S. bank to fail so far this year.
As it has in previous bank closings, FDIC has quickly sold off the failed bank's assets. In this case FDIC entered into a purchase and assumption agreement with Citizens Bank, Corvallis, Oregon, to assume all of the deposits of Silver Falls Bank. The three branches of Silver Falls Bank will become branches of Citizens Bank effective immediately,
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. Customers of both banks should continue to use their existing branches until Citizens Bank can fully integrate the deposit records of Silver Falls Bank, FDIC said.
Over the weekend, depositors of Silver Falls Bank were able to access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual, the agency said.
As of February 9, 2009, Silver Falls Bank had total assets of approximately $131.4 million and total deposits of $116.3 million. Citizens Bank did not pay a premium to acquire the deposits of Silver Falls Bank.
In addition to acquiring all of the failed banks deposits, including those from brokers, Citizens Bank agreed to purchase approximately $13 million in assets comprised of cash, cash equivalents, securities, overdraft loans, and deposit secured loans. The FDIC will retain any remaining assets for later disposition.
The FDIC estimates that the cost to the Deposit Insurance Fund will be $50 million.
