Washington State Department of Financial Institutions

DFI Takes Possession Of Westsound Bank
Kitsap Bank Will Be New Owner

On Friday, May 08, 2009, the Washington Department of Financial Institutions (DFI) took possession of Bremerton’s Westsound Bank, citing severe asset problems, significant losses and inadequate capital. Immediately upon taking possession, DFI appointed the Federal Deposit Insurance Corporation (FDIC) receiver. The FDIC entered into a purchase and assumption agreement with Kitsap Bank of Port Orchard, Wash. View press release from DFI.

Westsound Bank will reopen Monday — with minimal disruption of service throughout the weekend — under new ownership with Kitsap Bank of Port Orchard

“It is regrettable to have to take such actions, but DFI did so to ensure the soundness and stability of banking in Washington State,” said DFI's Director of Banks Brad Williamson. “This unfortunate event is the result of very poor lending practices during the past several years. While the current management team worked diligently to overcome problems with the bank’s loan portfolio — a combination of the downturn in the local real estate market and the overall economic situation combined to make it impossible for the institution to continue.”

Williamson reminds depositors that most deposits in Washington state chartered banks are insured by the FDIC up to $250,000.

Kitsap Bank will be assuming all deposits of Westsound bank except brokered deposits, which will be paid by the FDIC. It is anticipated that there will be no loss exposure to Westsound Bank depositors.

Information For Westsound Bank Customers

Resources For Westsound Bank Customers

Deposit Insurance For Washington Banks & Credit Unions

DFI wants to assure depositors that most deposits in Washington state chartered banks and credit unions are insured up to $250,000.

Banks and credit unions doing business in Washington State have federal deposit insurance through the Federal Deposit Insurance Corporation (FDIC) for banks and the National Credit Union Administration (NCUA) for credit unions. The NCUA's deposit insurance is called the National Credit Union Share Insurance Fund (NCUSIF).

On October 03, 2008 President Bush signed into law the emergency Economic Stabilization Act of 2008 which temporarily raises the insurance limits from $100,000 per account to $250,000 until December 31, 2009.

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