The Washington State Department of Financial Institutions closed First Heritage Bank in Snohomish on Friday evening.

For a second straight week, the $4.26 billion-asset Columbia Banking System, Inc. in Tacoma, Wash., submitted a winning bid.

Columbia State Bank entered into an agreement with the Federal Deposit Insurance Corp. to assume the failed bank's $163.3 million in deposits, with Columbia paying a 0.75% premium on the deposits.

Columbia also agreed to buy essentially all of the First Heritage's $173.5 million in assets, with $142.2 million of those assets covered by a loss-sharing agreement with the FDIC.

The failure is expected to cost the Deposit Insurance Fund $34.9 million. Its failure brings the total 2011 failure tally to 44.

On May 20, Columbia acquired Summit Bank in Burlington, Wash., in an FDIC-brokered transaction.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.