East West Bank has assumed all of the deposits of Washington First International Bank, after Washington First International Bank was closed by the Washington Department of Financial Institutions, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver.
To protect the depositors, the FDIC entered into a purchase and assumption agreement with East West Bank to assume all of the deposits of Washington First International Bank.
According to FDIC, the four branches of Washington First International Bank will now conduct their normal business as branches of East West Bank. Depositors of Washington First International Bank will automatically become depositors of East West Bank. Deposits will continue to be insured by the FDIC.
As of March 31, 2010, Washington First International Bank had approximately $520.9m in total assets and $441.4m in total deposits. East West Bank will pay the FDIC a premium of 0.5% to assume all of the deposits of Washington First International Bank.
In addition to assuming all of the deposits of the failed bank, East West Bank agreed to purchase approximately $501m of the failed bank’s assets. The FDIC will retain the remaining assets for later disposition.
The FDIC and East West Bank entered into a loss-share transaction on $418.8m of Washington First International Bank’s assets. East West Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector.