Westsound Bank Fails, Costing FDIC $108M

shington Department of Financial Institutions has closed Westsound Bank of Bremerton, Wash., and appointed the Federal Deposit Insurance Corp. (FDIC) receiver. To protect depositors, the FDIC entered into a purchase and assumption agreement with Kitsap Bank, Port Orchard, Wash., to assume all of the deposits, except those from brokers, of Westsound Bank. As of March 31, Westsound Bank had total assets of $334.6 million and total deposits of $304.5 million. Kitsap will not assume the approximately $9.4 million in brokered deposits, and the FDIC will pay the brokers directly. In addition to assuming the failed bank's deposits, Kitsap Bank will purchase $49.3 million of assets composed of cash, cash equivalents, marketable securities and loans secured by deposits. The FDIC will retain the remaining assets for later disposition. The transaction is the least costly resolution option, according to the FDIC, which estimates the cost to its Deposit Insurance Fund will be $108 million. Westsound Bank is the 33rd FDIC-insured institution to be closed this year and the second in Washington. SOURC


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