Mover Mike

This bank failure makes me sad.  Horizon Bank in Bellingham, Washington (HRZB) is the first bank to fail in 2010.  Horizon Bank was one of the banks that was in my portfolio of bank stocks when I was a broker.  They were one of the more conservative banks and they did not sell off their loan portfolio as many other banks did.  They originated their loans and serviced their loans.

Horizon’s deposits and assets were assumed by Washington Federal, at that time another conservatively run bank.  I don’t know how long the website will be up, but it says that Horizon Bank was 136 years old,

• “Healthy Banking for 136 years - How about them apples”.
• Horizon named “Best Investment Firm” by Northwest Indiana Business Quarterly Magazine.
• Horizon Named in Top 200 Community Banks by US Banker
• We’re Prepared for Emergencies. Are You?

The FDIC statement says that “As of September 30, 2009, Horizon Bank had approximately $1.3 billion in total assets and $1.1 billion in total deposits”, yet FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $539.1 million.  That means the assets weren’t worth $1.3 billion only $560,9 billion, less than 50% of what Horizon claimed they were worth.

How many more banks are out there with over-valued assets?

Tags: Housing //
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