Horizon Bank reopens as Washington Federal

Bellingham-based Horizon Bank was the first bank failure of 2010. It has struggled for more than a year under a crushing weight of bad real estate loans. When it was closed, it had $1.3 billion in assets and $1.2 billion in deposits.

In a notice to Horizon customers, Washington Federal's President, Chairman and CEO Roy Whitehead said, "We are saddened by the loss of a fellow member of our industry, but pleased to sincerely welcome Horizon’s customers and offer them the opportunity to remain with a Northwest bank."

Whether Washington Federal, which has another branch just 2 blocks north on Commercial, will keep the old Horizon Bank branch open remains to be seen. Washington Federal is expected to merge the two Anacortes branches, but which branch will be the one to close isn't known yet.

Washington Federal paid nothing for Horizon and expects to get a check from the Federal Deposit Insurance Corporation to cover the bank's liabilities. The FDIC also expects to pay out $188 million to cover high-interest deposits brought to the bank by brokers. All told, the FDIC expects Horizon's failure to cost the agency's insurance fund $539.1 million.