In its press release announcing the closing of First Bank of Idaho, the OTS said the thrift "was in unsound condition and unable to continue operating due to severe liquidity strains, deteriorating asset quality, negative earnings and declining capital."
TheStreet.com Ratings had assigned First Bank of Idaho a D-minus (Weak) financial strength rating in March, downgrading the institution from D-plus, which was assigned in December. The institution was still considered well capitalized per ordinary regulatory capital guidelines as of Dec. 31, and its net loss of $2.7 million for 2008 was relatively small for a thrift of its size.
The FDIC sold all of First Bank of Idaho's retail deposits to U.S. Bank for a small premium, and the failed institution's seven offices were scheduled to reopen as U.S. Bank branches Monday.
Once again, brokered deposits were not acquired. These totaled about $113 million and were to be paid directly to the brokers.U.S. Bank only took on $18 million of First Bank of Idaho's assets, with the FDIC retaining the rest and estimating the cost to its insurance fund to be $191.2 million. This marks the third failed institution with deposits and branches acquired by U.S. Bancorp. Other large bank holding companies making similar acquisitions of failed banks or thrifts during 2008 and 2009 have included Zions Bancorp (ZION - Get Report), SunTrust Banks (STI - Get Report) and Regions Financial (RF - Get Report).