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Columbia State Bank, Washington, on a Roll----

May 31, 2011 12:09 PM ET
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Columbia State Bank, Tacoma, Washington, assumed all of the deposits of First Heritage Bank, Snohomish, Washington, when closed by the Washington State Department of Financial Institutions. The six branches opened today as Columbia State Bank, bringing thier total branches to. Last Friday Columbia took over Summit Bank, Burlington.

January, 2010 Columbia took over American Marine Bank with 12 offices and bought Columbia River Bank Oregon with 21 branches. They took over Summit with three branches May 20, 2011.

March 9, 2011 Columbia Bank opened a new branch in Everett, Washington, announcing it was the second new branch open this year, bringing branches to 85. With the recent acquired banks, the branches now number 101 branches, 75 in Washington State and 26 in Oregon, according to the FDIC.

With the arrangements with the FDIC, undertaking the operation of new branches, investors should be very pleased, particularly wit a March 31, 2011 very high Tier 1 risk-based capital ratio of 17.62%.

Bank equity year-end 2009 was $470.6 million, 2010 $571.9 million, March 31, 2011 $580.3 million. Columbia State Bank lost $2.86 million year-end 2009, made a profit of $30.8 million year-end 2010 and March 31, 2011, $6.2 million. Non-current loans in 2009 were $110.4 million, $218.2 million year-2010 and $154.4 million.

Charges offs 2009, $52.7 million, 2010 $33.7 and $5.67 million March 31, 2011.

The 2009 charges offs were $37.8 million construction and land development, $5.3 million commercial and industrial loans, $2.5 million loans secured by 1-4 family residential properties, $1.2 million in consumer loans, $2.9 million in "other loans," a group of others including $18,000 in lease financing receivables.

2010 charge offs has $13.5 million in construction and land development, $10.1 million in loans secured by nonfarm nonresidential properties, $3.8 million in loans secured by 1-4 family residential properties $2.3 million in commercial and industrial loans, $2.8 million "other loans,"$885,000 "other consumer loans, and $62,000 in lease receivables.

March 31, 2011 charge offs were "other loans" $2.1 million,$1 million loans secured by nonfarm nonresidential properties, $810,000 construction and land development, $854,000 commercial and industrial loans, and recovered lease financing receivables, adding $9,000 back to the bank.

(Columbia Bank has also been active with their leasing division as well as underwriting other leasing companies. At one time, they accepted independent broker business.)


As of March 31, 2011, First Heritage Bank had approximately $173.5 million in total assets and $163.3 million in total deposits. Columbia State Bank will pay the FDIC a premium of 0.75 percent to assume all of the deposits of First Heritage Bank.

First Heritage has received a FDIC Consent and Decease order April of last year citing "“unsafe or unsound banking practices relating to management, capital, asset quality, loans, liquidity, and brokered deposits.” The bank was unsuccessful in raising new capital as when a bank fails, the investors lose everything.

The bank was established January 8, 1982 and had 57 full time employees in offices at Arlington, Everett, Marysville, Monroe, Snohomish, and Woodinville. Bank equity was $14.3 million year-end 2009, $4.27 million year-end, 2010 and $3.77 million March 31, 2011. The bank had lost $729,000 year-end 2009, $435,000 year-end 2010, and March 31, 2011. $435,000. Non-performing loans at year-end were $16.9 million, climbing from the previous year $14.5 million. Major charge offs were $1.5 million in loans secured by 1-4 family residential properties. March 31, 2011 there were charge offs of $1 million first liens, $539,000 junior liens, $103,000 by multifamily proprieties, $17,000 in 1-4 family residential construction, $321,000 land development construction loans, as well as $239,000 secured by nonfarm nonresidential property. Tier 1 risk-based capital ration was 2.97%.

The FDIC and Columbia State Bank entered into a loss-share transaction on $142.2 million of First Heritage Bank's assets.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $34.9 million.

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