|Including the closure of a bank in Oregon and a credit union in West Virginia, five financial institutions failed Friday.
The Oregon Division of Finance and Corporate Securities seized Pinnacle Bank in Beaverton, Ore., on Friday, a press release said. The Federal Deposit Insurance Corporation was appointed receiver.
The failure was the first for an Oregon-chartered bank since 1987, the state said in another announcement. In addition, no federal banks have filed in Oregon since 1991. The closure was tied to a high level of nonperforming commercial real estate loans. Commercial mortgage holdings were $14 million and construction and land development financing owned was $16 million as of Sept. 30, 2008, according to FDIC data.
Oregon also cited significant liquidity problems resulting from a reliance on non-local, brokered deposits in its decision to shut down the institution.
"We are saddened to see Pinnacle close," director of the division Cory Streisinger stated.
The FDIC issued a cease-and-desist order against Pinnacle last summer.
Washington Trust Bank in Spokane, Wash., agreed to acquire all of Pinnacle's $64 million in deposits as of Dec. 31.
Washington Trust will also acquire $72 million of Pinnacle's $73 million in assets at an $8 million discount with the FDIC sharing in losses on $66 million of the assets. Less than $4 million of Pinnacle's assets were residential mortgages as of Sept. 30, 2008.
The FDIC projects losses tied to the failure of seven-year-old Pinnacle -- which had just 21 employees -- to reach around $12 million.
Including three other bank failures announced Friday by the FDIC, Pinnacle was the 13th federally insured bank to be shut down this year.
Another financial institution -- Center Valley Federal Credit Union of Wheeling, W.V. -- was forced into liquidation Friday by the National Credit Union Administration, a news release said.
Center Valley, chartered in 1975, had 3,150 members and $8 million in deposits at liquidation.
"NCUA made the decision to liquidate Center Valley Federal Credit Union and discontinue its independent operation after determining that the credit union is insolvent and has no prospects for restoring viable operations." the statement said.
Center Valley was the second credit union failure this year, the fifth financial institution to fail on Friday and the 24th mortgage-related failure so far during 2009.
3 More Dead Banks
Three financial institution casualties today bring to 12 the number of federally insured banks to fail so far this year. The failures are projected to cost the bank insurance fund more than $300 million.