OLYMPIA – The Washington Department of Financial Institutions (DFI) closed First Heritage Bank in Snohomish, Wash. today, citing inadequate capital and severe loan losses. Immediately following the closure, DFI named the Federal Deposit Insurance Corporation (FDIC) as receiver of First Heritage Bank.
The FDIC immediately entered into a purchase and assumption agreement with Columbia State Bank headquartered in Tacoma, Wash. Columbia State Bank (doing business as Columbia Bank) will assume all of the deposits and assets of First Heritage Bank.
“First Heritage Bank’s capital has been depleted by large loan losses associated with land development and construction lending,” Gloria McVey, Acting Director of DFI’s Division of Banks explained. “Bank management was unable to raise sufficient capital to remain viable.”
“The closure of a Washington State chartered bank is never a welcome event,” DFI Director Scott Jarvis added. “However, a very positive signal is sent when Columbia, a financially strong state-chartered bank with an excellent reputation, steps up to acquire a failing institution and continues service to the affected communities.”
First Heritage Bank, headquartered in Snohomish, Wash. has five locations which will reopen Tuesday as branches of Columbia Bank.
Throughout the weekend and transition, First Heritage 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 March 31, 2011, First Heritage Bank had total assets of $173,478,000 and total deposits of $163,303,000.