Archive for February, 2010
Here are some comments from the Washington State Department of Financial Institutions about Rainer Pacific Bank, shut down by regulators earlier today:
Olympia – The Washington Department of Financial Institutions (DFI) closed Rainier Pacific Bank today, citing inadequate capital and severe loan losses. Immediately following the closure, DFI named the Federal Deposit Insurance Corporation (FDIC) as receiver of Rainier Pacific Bank.
The FDIC immediately entered into a purchase and assumption agreement with Umpqua Bank, headquartered in Roseburg, Ore. Umpqua Bank will assume all deposits and certain assets of Rainier Pacific Bank, except certain brokered deposits, which will be paid out by the FDIC.
“Rainier Pacific Bank’s capital has been depleted by significant securities write-downs and loan losses,” Brad Williamson, Director of DFI’s Division of Banks explained. “Rainier’s largest losses resulted from write-downs on collateralized debt obligations that lost tremendous value as the financial markets became illiquid and underlying asset values declined. Construction loan losses further eroded the bank’s capital position.”
“In these challenging economic times we are always disappointed when a bank is unable to continue safe and sound financial operations,” DFI Director Scott Jarvis said. “We are very pleased however to see the bank acquired as a whole bank purchase by a northwest bank with a growing presence in our state.”
“Umpqua Bank has always been committed to the financial health of the communities we serve,” Umpqua Holdings Corporation president and CEO Ray Davis said. “Umpqua is well positioned to assume the deposits and loans of Rainier Pacific Bank and we will work quickly to make this transition as smooth as possible for customers and employees.”
Rainier Pacific Bank, headquartered in Tacoma, Wash. has branches located in Pierce and King counties. All will be assumed by Umpqua Bank. Thirteen of Rainer Pacific’s 14 branches will open tomorrow as Umpqua Bank branches for normal Saturday banking hours. All locations including the main office will reopen on Monday, March 1.
Throughout the weekend and transition, Rainier Pacific Bank customers can access their funds by writing checks or using ATM or debit cards. Checks will continue to be processed. Loan customers should continue to make their payments as usual. Online services also will remain available.
As of Dec. 31, 2009, Rainier Pacific Bank had total assets of $717,800,000 and total deposits of $446,200,000.
Rainier Pacific Bank customers seeking more information about the closure should visit www.dfi.wa.gov/banks/rainierpacific.htm or www.fdic.gov or http://www.rainierpac.com/, Umpqua Bank will update the existing Web site.
Details about the closure are in the FDIC press release, pasted below. Rainier Bank is the second bank closed today, the other being Carson River Community Bank in Nevada:
Rainier Pacific Bank, Tacoma, Washington, was closed today by the Washington Department of Financial Institutions, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Umpqua Bank, Roseburg, Oregon, to assume all of the deposits of Rainier Pacific Bank.
The 14 branches of Rainier Pacific Bank will reopen during normal business hours as branches of Umpqua Bank. Depositors of Rainier Pacific Bank will automatically become depositors of Umpqua 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. Customers should continue to use their former Rainier Pacific Bank branch until they receive notice from Umpqua Bank that it has completed systems changes to allow other Umpqua Bank branches to process their accounts as well.
This evening and over the weekend, depositors of Rainier Pacific Bank can 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.
As of December 31, 2009, Rainier Pacific Bank had approximately $717.8 million in total assets and $446.2 million in total deposits. Umpqua Bank will pay the FDIC a premium of 1.04 percent to assume all of the deposits of Rainier Pacific Bank. In addition to assuming all of the deposits, Umpqua Bank agreed to purchase approximately $670.1 million of the failed bank’s assets. The FDIC will retain the remaining assets for later disposition.
The FDIC and Umpqua Bank entered into a loss-share transaction on $578.1 million of Rainier Pacific Bank’s assets. Umpqua Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html.
Customers who have questions about today’s transaction can call the FDIC toll-free at 1-800-830-4725. The phone number will be operational this evening until 9:00 p.m., Pacific Standard Time (PST); on Saturday from 9:00 a.m. to 6:00 p.m., PST; on Sunday from noon to 6:00 p.m., PST; and thereafter from 8:00 a.m. to 8:00 p.m., PST. Interested parties also can visit the FDIC’s Web site at http://www.fdic.gov/bank/individual/failed/rainier.html.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $95.2 million. Umpqua Bank’s acquisition of all the deposits was the “least costly” resolution for the FDIC’s DIF compared to all alternatives. Rainier Pacific Bank is the 22nd FDIC-insured institution to fail in the nation this year, and the fourth in Washington. The last FDIC-insured institution closed in the state was American Marine Bank, January 29, 2010.
# # #
Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation’s banking system. The FDIC insures deposits at the nation’s 8,012 banks and savings associations and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. The FDIC receives no federal tax dollars – insured financial institutions fund its operations.
FDIC press releases and other information are available on the Internet at www.fdic.gov, by subscription electronically (go to www.fdic.gov/about/subscriptions/index.html) and may also be obtained through the FDIC’s Public Information Center (877-275-3342 or 703-562-2200). PR-41-2010
According to the Skagit Valley Herald, Winco has canceled plans to build a store in Mount Vernon. Here is a (link) to the story. (thanks to a reader for the head’s up).
The company went through the planning process, getting approval by the Mount Vernon City Council. In a press release, the company told the paper “company resources would be better utilized in other locations.”
So far there has been no announcement about Winco trying again to build in Bellingham. It had originally been interested in a spot near the Bakerview Fred Meyer, but the plan was rejected by City Council.
Received an e-mail from the state’s Worker Adjustment and Retraining Notification program that Zumiez Inc., the clothing retailer, will be laying off 172 employees. According to the Herald in Everett, Zumiez will be shutting down its distribution center and moving it to Corona, Calif. The company will keep its corporate office in Everett. The effective date for the shutdown is April 23.
Recently the lease of World Cup Coffeehouse was not renewed and the cafe at 2118 James St. (which is also home to Moka Joe’s roasting company) was shut down. Now Moka Joe’s is making plans to open its own cafe in the building.
The Moka Joe’s cafe will be a place where the company can introduce new blends, educate consumers about coffee and provide special events, said Shey Hagen, a coffee roaster for the company. The new cafe is scheduled to open on Thursday, April 1.
“It will be a flagship store for us where people can enjoy our coffee,” Hagen said.
Yolanda Robles, owner of the World Cup Coffee, said in an e-mail that she is contemplating other options.
“I send heartfelt thanks to all of my wonderful customers who helped make my coffeehouse a thriving business. Your support and loyalty are greatly appreciated,” Robles said in the e-mail.
Details below on the closures of three banks, making it 20 so far in 2010:
No. 18: LaCoste National Bank of LaCoste, Texas, was closed, then taken over by National Bank of Hondo, Texas. LaCoste had one branch. Estimated cost to the FDIC: $3.7 million.
No. 19: George Washington Savings Bank of Orland Park, Ill., closed, then taken over by FirstMerit Bank of Akron, Ohio. George Washington had four branches. Estimated cost to the FDIC: $141.4 million.
No. 20: LaJolla Bank, LaJolla, Calif. was closed, then taken over by OneWest Bank in Pasadena, Calif. LaJolla had 10 branches. Estimated cost to the FDIC: $882.3 million.
I was scrolling through the Bellingham City building permits for the week and came across a couple of interesting items:
- There’s a permit application for a new restaurant at the Whatcom Plaza retail center on W. Kellogg Road, near Whatcom Community College. I believe that’s for Westside Pizza, which was an announced tenant from last month.
- There’s also an application filed to demolish a commercial building at 121 Unity St., which is home to Best Chopsticks, and turn it into a parking lot. I’ll check around to see what will become of the restaurant.
After a one-week hiatus, government regulators have resumed closing troubled banks. Details on the 17th bank closure of the year are below. I’ll add new posts if there are other closures later today.
Marco Community Bank of Marco Island, Fla. was shut down, then taken over by Mutual of Omaha Bank of Omaha, Nebraska. Marco had one branch. Estimated cost to the FDIC: $38.1 million.
Here’s a press release about four banks that are now all under one charter:
Capitol Bancorp Limited (NYSE:CBC) announced today that it has received regulatory and shareholder approval to consolidate Bank of Bellevue, Bank of Everett, Bank of Tacoma and Issaquah Community Bank. Effective February 19, 2010, the banks will consolidate into one charter and all four locations will begin operating as Bank of the Northwest on February 22, 2010.
Capitol’s Chairman and CEO Joseph D. Reid said, “We are pleased to join our four affiliates in the Puget Sound region. The synergies resulting from this consolidation will create new operational efficiencies and allow the bank to allocate capital more effectively.”
Leadership for the consolidated bank will be headed by Thomas Giovanelli, who will serve as the Chairman, President and CEO of the consolidated bank. Joining Giovanelli on the executive management team are Robert Ittes, who will serve as District President of King County; Michael Hansch, who will serve as Community President of Tacoma; Mal Harding, who will serve as Community President of Everett; John Williams, who will serve as Chief Credit Officer; and Annetta Mirabella, who will serve as Chief Operations Officer.
“We are committed to ensuring that our customers are not impacted by the consolidation. I am confident that the Bank of the Northwest will continue to exceed our customers’ expectations with the same high-quality service they have grown to expect,” added Giovanelli.
About Capitol Bancorp Limited
Capitol Bancorp Limited (NYSE:CBC) is a $5.2 billion national community banking company with a network of separately chartered banks in 17 states. Founded in 1988, Capitol Bancorp Limited has executive offices in Lansing, Michigan, and Phoenix, Arizona.