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Cowlitz Bank Sold

Posted on 31st July 2010 at 08:02

The other shoe dropped on Friday, as the Federal Deposit Insurance Corporation and the Washington Department of Financial Institutions ordered the closure of Cowlitz Bank, and its subsequent sale to Heritage Bank of Olympia. The sale covers all nine branches of the bank, including the two Oregon branches and the three Bay Bank branches. Dozens of regulators descended on the bank’s main branch in Longview late Friday afternoon, posting notices of the closure and beginning the sale process. The FDIC says that Cowlitz Bank will re-open for normal banking on Saturday, but now under the Heritage Bank name. FDIC officials assure Cowlitz Bank customers that their deposits are automatically transferred to Heritage Bank, so there’s no need to change accounts. It’s also noted that funds deposited in Cowlitz Bank will still be accessible through checks and ATM’s over the weekend. The FDIC and Heritage Bank entered into what’s called a “loss-share transaction,” valued at $160.9 million. Heritage Bank agreed to pay a one percent premium on Cowlitz Bank deposits, and assumed around $329.5 million of Cowlitz Bank assets. The remainder of the assets, approximately $199.8 million, are being retained by the FDIC for future disposition. The acquisition cost the Deposit Insurance Fund approximately $68.9 million, but is also being called the FDIC’s “least costly” acquisition of the year. Cowlitz Bank is the 107th bank in the U. S. to fail this year, and the eighth in Washington State. All current employees are being retained at this time; Heritage Bank officials say that it will be “business as usual” on Monday morning. It’s unclear at this time what will happen with Cowlitz Bank’s current executives. If you have questions about the sale, the FDIC has a toll-free number available from 9 am to 6 pm on Saturday, noon to 6 on Sunday and 8 am to 8 pm after that. That number is 1-800-528-6215.