Regulators close Westsound Bank in Washington state
WASHINGTON (Reuters) - Bank regulators closed Westsound Bank in Bremerton, Washington, on Friday, the 33rd U.S. bank to fail this year as the struggling economy and falling home prices take their toll on financial institutions.
The Federal Deposit Insurance Corp said Westsound Bank had $334.6 million in assets and $304.5 million in deposits. The failure is expected to cost the FDIC deposit insurance fund an estimated $108 million.
Kitsap Bank, of Port Orchard, Washington, agreed to assume the insured deposits of Westsound Bank, whose nine branches will reopen on Monday as branches of Kitsap Bank.
Customers can access their money over the weekend by check, teller machine or debit card, the FDIC said.
In addition to assuming the failed bank's deposits, Kitsap Bank will purchase $49.3 million of assets comprising cash, cash equivalents, marketable securities and loans secured by deposits. The FDIC said it will retain the remaining assets for later disposition.
Kitsap will not assume the approximately $9.4 million in brokered deposits at Westsound. The FDIC will pay the brokers directly. Customers who placed money with brokers should contact them directly for more information about the status of their deposits, the FDIC said.
In 2008, 25 U.S. banks were seized by officials, up from only 3 in 2007.
During the current financial crisis, Seattle-based lender Washington Mutual became the biggest bank to fail in U.S. history. It was closed in September while suffering from losses from soured mortgages and liquidity problems.
The FDIC will insure up to $250,000 per account through 2009 and in individual retirement accounts at insured banks.
The agency also has a running tally of problem banks that its examiners closely monitor. At the end of the fourth quarter, 252 undisclosed institutions were on that list.
(Reporting by Susan Cornwell; Editing by Gary Hill)
