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First Bank Failure of 2010

BELLINGHAM, Wash. ( TheStreet) - State regulators on Friday shut down Horizon Bank of Bellingham, Wash. This was the first bank failure of 2010, after 140 banks and savings and loan associations were closed by regulators during 2009.

The Federal Deposit Insurance Corporation was appointed receiver and arranged for Washington Federal Savings of Seattle to take assume the failed bank's $1.1 billion in deposits and $1.3 billion in total assets. Washington Federal savings is the main subsidiary of Washington Federal (WFSL).

The FDIC agreed to share in losses on $1 billion of the acquired assets, and estimated the cost to the deposit insurance fund would be $539 million.

Horizon Bank's 18 branches were scheduled to reopen during normal business hours Saturday.

The failed bank had been assigned an E-minus (Very Weak) rating by Ratings in September, which was a downgrade from E-plus. The institution was included in's list of undercapitalized banks and thrifts.

Net losses of $71 million during the first half of 2009, mainly from charge-offs of nonperforming commercial and residential construction loans left the bank undercapitalized per regulatory guidelines at the end of the second quarter and another $35 million net loss for the third quarter nearly wiped-out the bank's capital.

State regulators closed the bank after it failed to meet a 30 day deadline to raise additional capital that was set by the FDIC on Dec. 3.

Ongoing Bank Failure Coverage

All previous bank and thrift failures for 2008 and 2009 are detailed in's interactive bank failure map:
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