The State Department of Financial Institutions announced tonight that it had closed Tacoma-based Rainier Pacific Financial Group, parent of the 14-branch Rainier Pacific Bank.
In a deal facilitated by the Federal Deposit Insurance Corp., the assets of the bank were assumed in a whole-bank transaction by Oregon-based Umpqua Holdings.
All branches will reopen at their regular hours under the Umpqua brand.
The failure of Rainier Pacific was not unexpected.
Rainier Pacific recently reported a fourth-quarter net loss of $26.5 million. which compares to a net loss of $14.1 million for the same quarter in 2008.
Much of the distress was due to an investment in “trust preferred securities” issued by insurance companies and other banks. At the time of the report, Rainier Pacific President and CEO John Hall said the bank ‘s financial condition “continues to be plagued by (those) investments.”
The bank also encountered difficulty with its loan portfolio in the fourth quarter, with nonperforming loans of $32 million. For the whole of 2008, Rainier Pacific reported a net loss of $69.9 million.
The bank began in 1932 as Tacoma Teachers Credit Union, and in 1973 became Educational Employees Credit Union. Following a 1988 merger with Health Care Credit Union, the company in in 1995 became Rainier Pacific, A Community Credit Union.
At the beginning of 2001, Rainier Pacific was born with the conversion to a state-chartered mutual savings bank. In 2003, the bank converted once again to become a state-chartered savings bank.
Umpqua, with branches primarily in Oregon but also in Washington and California, purchased the assets assets of the failed Seattle-based Evergreen Bank in January – signaling a strong move into the Puget Sound area.
The purchase of Rainier Pacific pits the Oregon bank against a growing Tacoma-based Columbia Bank, which has expanded in Oregon – most recently with the purchase of Columbia River Bank, based in The Dalles, but also with the purchase several years ago of Bank of Astoria.