Community First Bank, an Oregon-based bank, has been closed by the Oregon Division of Finance & Corporate Securities, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. In order to protect the depositors, the FDIC entered into a purchase and assumption agreement with Idaho-based Home Federal Bank, to assume all of the deposits of Community First Bank, excluding those from brokers.
Reportedly, the eight branches of Community First Bank will reopen as branches of Home Federal Bank and the depositors of Community First Bank will become depositors of Home Federal Bank. Moreover, the deposits will continue to be insured by the FDIC. The bank said that the customers can continue to use their existing branches until Home Federal Bank can fully integrate the deposit records of Community First Bank.
In addition to assuming all of the deposits of the failed bank, Home Federal Bank has also agreed to purchase approximately $197 million of assets. The FDIC will retain the remaining assets for later disposition.
Home Federal Bank will purchase all deposits, except about $31 million in brokered deposits, held by Community First Bank. The FDIC will pay the brokers directly for the amount of their funds.
Additionally, the FDIC and Home Federal Bank entered into a loss-share transaction on approximately $155 million of Community First Bank’s assets. Home Federal Bank will share in the losses on the asset pools covered under the loss-share agreement.
