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.