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 TheStreet.com Ratings in September, which was a downgrade from E-plus. The institution was included in TheStreet.com'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 TheStreet.com's interactive bank failure map:
chart

The bank failure map is color-coded, with states having the greatest number of failures highlighted in red, and states with no failures in grey. By hovering your mouse over a state you can see the combined 2008-2009 totals for each state. Then click the state top open a detailed map with pinpointing the locations and providing additional information for each bank failure.

While there have been bank and thrift failures in 34 states during from the beginning of 2008 through Friday, four states have combined for more than half of that total:

Georgia leads all states with 30 bank or thrift failures from 2008 through Friday, followed by Illinois and California with 22 each, and Florida with 16 failures.

Large holding companies acquiring failed institutions during 2008 and 2009 have included J.P. Morgan Chase ( JPM), which acquired Washington Mutual, the largest-ever bank or thrift to fail in the U.S; U.S. Bancorp ( USB); SunTrust Banks ( STI); Regions Financial ( RF); Fifth Third Bancorp ( FITB); Zions Bancorp ( ZION); and PNC Financial ( PNC); and BB&T ( BBT).

Free Financial Strength Ratings

The FDIC's temporary increase of agency's basic limit on individual deposit insurance coverage to $250,000 from $100,000 has been extended through 2013. While the agency also temporarily waived all deposit insurance limits for business transaction accounts (checking accounts), the insurance limit on these accounts are scheduled to go back to the $100,000 insurance limit on June 30.

It will be more important than ever for business and municipal entities such as school districts to carefully monitor the health of their banks. It's very easy to have more than $100,000 of somebody else's money flowing through a business account.

TheStreet.com Ratings issues independent and very conservative financial strength ratings on each of the nation's 8,500 banks and savings and loans. They 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.

TheStreet.com Ratings also provides award-winning stock ratings, which are available on the Stock Ratings Screener.

TheStreet.com Ratings was recently ranked the No. 1 independent stock selector during the market meltdown by BNY ConvergEx Group's BNY Jaywalk.

-- Written by Philip van Doorn in Jupiter Fla.

Philip W. van Doorn joined TheStreet.com Ratings., Inc., in February 2007. He is the senior analyst responsible for assigning financial strength ratings to banks and savings and loan institutions. He also comments on industry and regulatory trends. Mr. van Doorn has fifteen years experience, having served as a loan operations officer at Riverside National Bank in Fort Pierce, Florida, and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a Bachelor of Science in business administration from Long Island University.

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