Weiss Ratings Identified First Heritage Bank as “Weak” Nearly Three Years Ahead of Failure

JUPITER, Florida (May 31, 2011) — On Friday, regulators closed one bank: First Heritage Bank, Snohomish, Washington.  This brings the total number of U.S. bank and thrift failures to 44 for 2011, behind last year’s pace of 78.  This is Washington’s second bank failure in as many weeks, while they had 11failures for all of 2010.

Of the 44 institutions that have failed in 2011, 42, or 95%, were rated E- (“Very Weak”) by Weiss at the time of failure.  Weiss rates 482 more banks and thrifts “Very Weak” with a rating of E+, E, or E-.  Consumers can view the full list at www.weissratings.com. 

First Heritage Bank of Snohomish, Washington, with assets of $179.4 million at December 31, 2010 had been rated E- (“Very Weak”) for six quarters by Weiss Ratings and was first identified as “Weak” in June 2008. It reported a loss of more than $11.3 million for the year ended December 31, 2010.  First Heritage had below-FDIC-mandated Tier 1 (5%) and risk-based capital (6%) ratios of 2.22% and 4.45%, respectively.  Nonperforming loans represented 13.6% of its loan portfolio and charge-offs to loans were 5.1%.  Columbia State Bank of Tacoma, Washington, with assets of $4.2 billion and a Weiss Rating of D+, will assume the deposits of First Heritage Bank. 

Weiss Ratings, the nation’s leading independent provider of bank, credit union and insurance company financial strength ratings and sovereign debt ratings, accepts no payments for its ratings from rated institutions.  It also distributes independent investment ratings on the shares of thousands of publicly traded companies, mutual funds, closed-end funds and ETFs.