Regulators shut down Horizon Bank
Published 5:32 pm Monday, January 11, 2010
Regulators closed Bellingham-based Horizon Bank on Friday, citing the troubled bank’s severe loan losses.
Seattle’s Washington Federal Savings and Loan has agreed to take on the bank’s deposits and most of its assets in an agreement also reached Friday with the Federal Deposit Insurance Corp. As of Sept. 30, Horizon Bank had assets of $1.3 billion and deposits totaling $1.1 billion. The shutdown of Horizon Bank marks the year’s first bank closure in the U.S.
“Like many banks across the country, Horizon’s real estate construction and development portfolio has suffered as real estate values have fallen,” said Brad Williamson, director of the division of banks for the Washington state Department of Financial Institutions.
Horizon was slammed by fallout from bad real estate loans last year. Officials agreed to a federal cease-and-desist order, which forced the bank to resolve its capital crisis — or else. The FDIC gave Horizon a final ultimatum one month ago to find new capital or merge with another bank.
Last year, 140 banks across the country failed. That’s the highest total since 1992, during the height of the savings and loan crisis. Horizon Banks’ situation didn’t improve in December. Late that month, Horizon received a NASDAQ notification of noncompliance, signaling that the company’s common stock hadn’t maintained the minimum market value of $5 million for 30 consecutive days. The bank was given 90 days to regain compliance before being delisted.
Horizon Bank customers should see little to no disruption in their banking as Washington Federal takes over. Any Horizon branch that normally is open on Saturday will be open today. Horizon customers can continue use their ATM cards and checks.
“Customers should expect business as usual,” Williamson said. The federal and state financial systems protect customers in this situation, he said.
Horizon, which was established in 1922, operates 18 branches in western Washington, including offices in Everett, Marysville, Murphy’s Corner, Snohomish, Lynnwood and Edmonds. Washington Federal operates 150 offices across the West. On Sept. 30, the company reported $12.6 billion in assets, $7.8 billion in deposits and $1.7 billion in stockholders’ equity.
