The Washington Department of Financial Institutions (DFI) closed Summit Bank in Burlington, Wash. Friday, citing inadequate capital and severe loan losses. Immediately following the closure, DFI named the Federal Deposit Insurance Corporation (FDIC) as receiver of Summit Bank.
The FDIC immediately entered into a purchase and assumption agreement with Columbia State Bank headquartered in Tacoma. Columbia State Bank (doing business as Columbia Bank) will assume all of the deposits, except approximately $2 million in brokered deposits and all assets of Summit Bank.
“Like many institutions, Summit Bank has experienced large losses associated with construction and land development loans,” Gloria McVey, Acting Director of DFI’s Division of Banks explained. “Despite continuing efforts, bank’s management was not able to raise sufficient capital to remain viable.”
“The closure of a Washington State chartered bank is never a welcome event,” DFI Director Scott Jarvis added. “However, a very positive signal is sent when Columbia, a financially strong state-chartered bank with an excellent reputation, steps up to acquire a failing institution and continues service to the affected communities.”
Summit Bank has three locations which will reopen today as branches of Columbia Bank.
Throughout the weekend and transition, Summit Bank customers were able to 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, 2011, Summit Bank had total assets of $142,729,000 and total deposits of $131,631,000.
Summit Bank customers seeking more information about the closure should visit http://www.dfi.wa.gov/banks/summitbank.htm , http://www.fdic.gov , http://www.summitbank-wa.com or http://www.columbiabank.com .
For more information about deposit insurance for Washington banks and credit unions, visit http://www.dfi.wa.gov/consumers/deposits.htm . For details about FDIC coverage and requirements, visit http://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://www.dfi.wa.gov/banks/business-loan-faqs.htm .
“We are very pleased to warmly welcome former Summit Bank customers into our extended Columbia Bank network,” said Melanie J. Dressel, President and Chief Executive Officer of Columbia Banking System. “Branches will open under new ownership; however, customers will be able to bank as usual during regular business hours, and their deposits are safe, available and remain FDIC insured.”
Ms. Dressel continued, “We look forward to working with the Summit team, who have a long heritage of serving Skagit County communities. We are committed to continuing that tradition.”