Friday, July 30, 2010
Lyn Peters, Director of Communications
PH (360) 902-8731 email@example.com
Brad Williamson, DFI Director, DFI Division of Banks
PH (360) 902-8704 firstname.lastname@example.org
FOR IMMEDIATE RELEASE:
Heritage Bank Of Olympia, Wash. Purchases Cowlitz Bank After Closure By Department Of Financial Institutions
Acquisition includes five branches in Oregon and Washington operating as Bay Bank
OLYMPIA – The Washington Department of Financial Institutions (DFI) closed The Cowlitz Bank of Longview, Washington today, citing inadequate capital and severe loan losses. Immediately following the closure, DFI named the Federal Deposit Insurance Corporation (FDIC) as receiver of Cowlitz Bank.
The FDIC immediately entered into a purchase and assumption agreement with Heritage Bank headquartered in Olympia, Wash. Heritage Bank will assume all deposits and certain assets of Cowlitz Bank, except certain brokered deposits, which will be paid out by the FDIC.
“Cowlitz Bank’s capital has been eroded by large loan losses associated with land development and construction lending,” Brad Williamson, Director of DFI’s Division of Banks explained. “The bank’s management was not able to raise capital to offset the significant loan losses. The bank is critically undercapitalized which requires today’s closure.”
“The failure of Cowlitz Bank is an unfortunate example of the severe consequences these exceptionally challenging economic times bring for our financial institutions that have been heavily committed to commercial real estate land acquisition and construction lending,” DFI Director Scott Jarvis said. “While it is difficult to close a bank with such strong commitment to its community, we are pleased that Heritage Bank, a Washington State-chartered bank with a strong balance sheet and an 80-year history of serving its communities, has acquired Cowlitz Bank.”
The Cowlitz Bank, headquartered in Longview, Wash. has nine branches located throughout Washington and Oregon. Five of the organization’s nine branches operate under the name of Bay Bank. Bay Bank Washington branches are located in Bellevue, Seattle and Vancouver. Bay Bank Oregon branches are located in Portland and Wilsonville. Cowlitz Bank branches are located in Longview, Castle Rock, Kalama and Kelso, Wash. Heritage Bank will acquire all Cowlitz and Bay Bank branches. All locations will reopen Monday as branches of Heritage Bank. The Longview Cowlitz Bank drive-up facility will reopen on Saturday with normal business hours.
Throughout the weekend and transition, Cowlitz and Bay Bank customers can access their funds by writing checks or using ATM or debit cards. Checks will continue to be processed. Loan customers should continue to make their payments as usual. Online services also will remain available.
As of March 31, 2010, Cowlitz Bank had total assets of $529,332,000 and total deposits of $513,953,000.
For more information about deposit insurance for Washington banks and credit unions, visit www.dfi.wa.gov/consumers/deposits.htm. For details about FDIC coverage and requirements, visit www.fdic.gov or call toll-free 1.877.ASK.FDIC.
DFI also offers answers to frequently asked questions for bank business loan customers in turbulent times at http://dfi.wa.gov/banks/business-loan-faqs.htm.
About Division of Banks
www.dfi.wa.gov/banks ▪ 360.902.8704 ▪ 877.RINGDFI (746.4334) x 28704
The Washington State Department of Financial Institutions Division of Banks regulates 81 Washington State-chartered commercial banks, stock savings banks, mutual savings banks, foreign banks, savings and loan associations and independent trust companies. We charter new banks, business development corporations, trust companies, foreign banks and savings and loan associations. Also, we authorize new branches and branch closures; and approve mergers and acquisitions.
www.dfi.wa.gov ▪ 360.902-8700 ▪ 877.746-4334
The Washington State Department of Financial Institutions regulates a variety of financial service providers such as banks, credit unions, mortgage brokers, consumer loan companies, payday lenders and securities brokers and dealers. The department also works to improve financial education throughout Washington through its outreach programs and online clearinghouse www.dfi.wa.gov/financial-education. In addition to posting information about licensees and administrative actions, DFI uses the Web and social media to provide financial education information: www.twitter.com/FinEd4All, www.twitter.com/DFIConsumers, www.finlit.blogspot.com, www.youtube.com/user/WADFI, www.homeownership.wa.gov.