On Friday, the Washington State Department of Financial Institutions closed Horizon Bank, headquartered in Bellingham, Washington, and the FDIC was named receiver. As receiver, the FDIC entered into a purchase and assumption agreement with Washington Federal Savings and Loan Association, headquartered in Seattle, Washington, to assume all of the deposits of Horizon Bank. Washington Federal Savings and Loan Association did not pay a premium for the deposits of the failed bank.

As of September 30, 2009, Horizon Bank had approximately $1.3 billion in total assets and $1.1 billion in total deposits. Washington Federal Savings and Loan Association also agreed to purchase essentially all of the assets of the failed bank. The FDIC and Washington Federal Savings and Loan Association entered into a loss-share transaction on $1.0 billion of Horizon Bank’s assets.

The FDIC estimates that the cost to the Deposit Insurance Fund will be $539.1 million. Horizon Bank is the first FDIC insurance institution to fail in the nation this year.