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Feds seize first Idaho bank since 1988

The institution was among four taken over by regulators, bringing the total of bank failures nationwide this year to 29.

 - THE ASSOCIATED PRESS

Published: 04/25/09


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The Federal Deposit Insurance Corp. will continue to insure deposits at all seven branches of the Ketchum-based First Bank of Idaho. Regular deposit accounts are insured up to $250,000.

First Bank of Idaho had branches in Idaho and Wyoming, including offices in Ketchum, Hailey, Bellevue, Driggs and Victor and two locations in Jackson, Wyo. All will reopen Monday as branches of U.S. Bank.

Customers can still write checks and use ATM or debit cards, and loan customers should continue to make their payments as usual. Customers can call (800) 591-2845.

First Bank of Idaho was closed by the Office of Thrift Supervision. The FDIC was appointed receiver of the bank, which had about $488.9 million in assets and $374 million in deposits as of Dec. 31.

The FDIC said the bank's deposits, excluding $112.8 million in brokered deposits, will be assumed by U.S. Bank of Minneapolis. The FDIC will pay the brokers directly for the amount of their funds.

In addition to acquiring the failed bank's deposits, U.S. Bank will purchase about $17.8 million in assets. The FDIC will retain the rest for eventual sale.

The last FDIC-insured institution to fail in Idaho was Northwestern Federal Savings and Loan Association, in Boise, in August 1988.

The list of bank failures is growing as falling home prices and rising unemployment cause more individuals and businesses to default on their debt. The failures have sapped billions from the deposit insurance fund. As of Dec. 31, the fund stands at $18.9 billion, compared with $52.4 billion at the end of 2007.

The other banks seized were American Southern Bank in Georgia, Michigan Heritage Bank and First Bank of Beverly Hills in California.

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