Oregon Regulators Close Small Bank

TheStreet.com Ratings had assigned Silver Falls Bank an E (Very Weak) financial strength rating in January, a downgrade from the D- (Weak) rating assigned last June. As of Dec. 31, the institution's problem loans reached a critical level, as nonperforming assets made up 26.57% of total assets.

Silver Falls Bank had total assets of about $131 million and deposits of $116 million. All deposits, including any uninsured balances and brokered deposits, were assumed by Citizens Bank, along with $13 million in assets. The failed bank's three offices were set to reopen Monday as Citizens' branches.

The FDIC estimated that the cost to its insurance fund on the remaining $118 million in assets would be $50 million.

Ratings

The failure of Silver Falls Bank turned out well for depositors, since the FDIC was able to find a bank willing to acquire all deposits, including uninsured balances and CD deposits made through brokers.

However, in several recent failures, uninsured deposits were not acquired, leading to losses for some depositors. In some cases, retail deposits were acquired but brokered CD deposits were not, leaving depositors waiting for their brokers to provide the FDIC with the information required so the agency can return the money to the brokers. These depositors may also face the prospect of getting a much lower rate on their next CD deposit, especially if they had locked in much-higher rates through their brokers a few months back.

TheStreet.com Ratings issues independent and very conservative financial strength ratings on each of the nation's 8,500 banks and savings and loans. These are available at no charge on the Banks & Thrifts Screener. In addition, the Financial Strength Ratings for 4,000 life, health, annuity and property/casualty insurers are available on the Insurers & HMOs Screener.

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