Idaho closes Syringa Bank; Sunwest to take over Monday

Feb. 02--The money in Syringa Bank's vaults is staying put, but the name above the door isn't after the Federal Deposit Insurance Corporation absorbed the Boise-based bank Friday.

Syringa Bank, which has six branches including one on Bryden Avenue in Lewiston, was closed by the Idaho Department of Finance, which named the FDIC as receiver of Syringa's assets.

According to an FDIC news release, the insurer is turning the failed bank's assets over to Sunwest Bank of Irvine, Calif.Sunwest agreed to assume all the failed bank's deposits and assets in time to reopen the former Syringa branches Monday as Sunwest banks.

The FDIC assured Syringa customers that because the FDIC still insures their accounts they could continue to use Syringa branch locations, checks, debit and ATM cards. Loan customers should also continue making scheduled payments as loan terms will not change during the transition. Online banking customers can continue to access their accounts, though they will be intially rerouted through a Sunwest portal.

According to the release, Sunwest will notify customers when the conversion to their systems is complete and full-service banking is being offered at the six Syringa locations.

Director Gavin Gee said in an Idaho Department of Finance news release Friday that Syringa, which reportedly had $153 million in assets in September 2013, was torpedoed by the Great Recession's effect on Idaho's real estate market and then sunk by significant losses on its net $116 million in loans.

"The Board of Directors and management worked diligently over a long period to address the bank's problems," Gee said. "Ultimately, despite their best efforts, the bank was not able to overcome the consequences of the steep declines in real estate values in Idaho that began in 2007."

Gee said Syringa officials cooperated fully with regulators throughout the closure process.

Syringa Bank, which was issued its charter in 1997, was the third bank closed in the U.S. this year and the first in Idaho since First Bank of Idaho in Ketchum was shuttered in 2009. The last local bank to close was Bank of Whitman, which was acquired by Columbia State Bank in 2011.

Syringa Bank's failure is expected to cost the FDIC's deposit insurance fund $4.5 million.

According to the Associated Press, while the fund returned to the black in 2011 after paying out approximately $88 billion from 2008 to 2011, the 24 closures in 2013 were still far above their average in a strong economy. The fund had dropped into the negative in 2009 and the number of closures peaked at 157 in 2010.

According Department of Finance release, closures should remain rare in Idaho though.

"The remaining Idaho state-chartered banks continue to show improvement," said Gee. "More than 90 percent of Idaho banks reported a profit at the end of the year and are well-capitalized."

Brown may be contacted at [email protected] or (208) 848-2278. Follow him on Twitter @DylanBrown26.

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