Federal regulators closed struggling Lynnwood-Based City Bank Friday and immediately sold it to Oak Harbor-based Whidbey Island Bank, the Washington state Department of Financial Institutions reported.

Whidbey Island Bank acquired eight branches, approximately 60% of the assets and all non-brokered deposits of City Bank through a purchase and assumption agreement with the Federal Deposit Insurance Corporation. Six of the branches are in Snohomish and two are in King County, with no overlap with Whidbey Island Bank branches.

“This acquisition presents a great opportunity for us to strengthen our geographic footprint by deepening our customer relationships and enhancing our distribution network,” said Jack Wagner, Whidbey Island Bank president and chief executive officer.

Wagner said the sale was a bargain for Whidbey Island Bank and should make investors happy.

“The FDIC excluded approximately $328 million in brokered deposits, $180 million in other real estate owned and $132 million of nonperforming loans from the bidding process, which was instrumental in reducing the risk and allowing us to proceed with this transaction,” he said.

The deal expands Whidbey Island’s branches to 26 in six counties. The company is expected to have total assets of about $1.7 billion when the acquisition is complete.