On Friday, the Washington Department of Financial Institutions closed North County Bank, headquartered in Arlington, Washington, and appointed the FDIC as receiver. As receiver, the FDIC entered into a purchase and assumption agreement with Whidbey Island Bank, headquartered in Coupeville, Washington, to assume all of the deposits of the failed bank.

As of June 30, 2010, North County Bank had approximately $288.8 million in total assets and $276.1 million in total deposits. Whidbey Island Bank will pay the FDIC a premium of 2.0% to assume all of the deposits of North County Bank and will purchase essentially all of the failed bank's assets. The FDIC and Whidbey Island Bank entered into a loss-share transaction on $221.9 million of North County Bank's assets.

The FDIC estimates that the cost to the Deposit Insurance Fund will be $72.8 million. North County Bank is the 127th FDIC-insured institution to fail in the nation this year, and the fifth in Washington. This is the second failed bank that Whidbey island Bank has acquired.