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A Seattle bank hobbled by faltering commercial real estate loans became the 82nd U.S. bank failure this year, costing the insurance fund of the Federal Deposit Insurance Corp. more than $158 million.
The deposits of Washington First International were assumed by East West Bank, of Pasadena, California.
As of March 31, 2010, Washington First had about $520.9 million in total assets and $441.4 million in total deposits. East West Bank will pay the FDIC a premium of 0.5 percent to assume all of the deposits of Washington First.
Washington state regulators described the bank’s troubles as indicative of a troubling trend with hundreds of community banks that carry inadequate capital and are hit with severe loan losses.
“Washington First International Bank’s capital has been depleted by large loan losses associated with land development and construction lending,” Brad Williamson, a director with the state’s Department of Financial Institutions. “The bank’s management unsuccessfully attempted to raise capital and recent loan losses depleted the bank’s capital, bringing about today’s closure.”
The number of insured banks on the FDIC’s “Problem List” jumped from 702 to 775 during the first quarter, with their total assets increasing from $403 billion to $431 billion.
The number of bank failures is expected to peak this year, and surpass last year’s total of 140. That was the highest number of bank closures in nearly two decades.
Seattle Bank Hit by ?Severe? Loan Losses is 82nd Failure | ecreditdaily.com
The deposits of Washington First International were assumed by East West Bank, of Pasadena, California.
As of March 31, 2010, Washington First had about $520.9 million in total assets and $441.4 million in total deposits. East West Bank will pay the FDIC a premium of 0.5 percent to assume all of the deposits of Washington First.
Washington state regulators described the bank’s troubles as indicative of a troubling trend with hundreds of community banks that carry inadequate capital and are hit with severe loan losses.
“Washington First International Bank’s capital has been depleted by large loan losses associated with land development and construction lending,” Brad Williamson, a director with the state’s Department of Financial Institutions. “The bank’s management unsuccessfully attempted to raise capital and recent loan losses depleted the bank’s capital, bringing about today’s closure.”
The number of insured banks on the FDIC’s “Problem List” jumped from 702 to 775 during the first quarter, with their total assets increasing from $403 billion to $431 billion.
The number of bank failures is expected to peak this year, and surpass last year’s total of 140. That was the highest number of bank closures in nearly two decades.
Seattle Bank Hit by ?Severe? Loan Losses is 82nd Failure | ecreditdaily.com
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