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Northwest U.S. loses banking network
Afghanistan News.Net
Friday 30th July, 2010
The Cowlitz Bank, of Longview, Washington, incorporating branches operating as Bay Bank, was closed on Friday by the Washington Department of Financial Institutions.
Cowlitz Bank, which was founded in 1977 and had more than a half-billion dollars in assets as at Friday, specialized in commercial and international banking services for Northwest U.S. businesses, professionals, and retail customers, and offered trust services in Washington and Oregon.
As is usual in this type of situation the Federal Deposit Insurance Corporation (FDIC) was appointed as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Heritage Bank, Olympia, Washington, to assume all of the deposits of The Cowlitz Bank and its Bay Bank branches.
The nine branches of The Cowlitz Bank including branches operating under the Bay Bank banner, in Seattle, Bellevue, Castle Rock, Kelso, Longview, Kalama, and Vancouver in Washington, and in Portland and Wilsonville, in Oregon, will reopen on Saturday during normal banking hours as branches of Heritage Bank. Depositors of The Cowlitz Bank and Bay Bank will automatically become depositors of Heritage Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage. Customers of The failed banks should continue to use their existing branch until they receive notice from Heritage Bank that it has completed systems changes to allow other Heritage Bank branches to process their accounts as well.
On Friday night and during the weekend, depositors of The Cowlitz Bank and Bay Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual, an FDIC statement issued on Friday night said.
As of March 31, 2010, The Cowlitz Bank group had approximately $529.3 million in total assets and $513.9 million in total deposits. Heritage Bank paid the FDIC a premium of 1.0 percent for the deposits of The Cowlitz Bank. In addition to assuming all of the deposits of the failed bank, Heritage Bank agreed to purchase approximately $329.5 million of the failed bank's assets. The FDIC will retain the remaining assets for later disposition.
The FDIC and Heritage Bank entered into a loss-share transaction on $160.9 million of The Cowlitz Bank's assets. Heritage Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $68.9 million. Compared to other alternatives, Heritage Bank's acquisition was the least costly resolution for the FDIC's DIF. The Cowlitz Bank is the 107th FDIC-insured institution to fail in the nation this year, and the eighth in Washington. The last FDIC-insured institution closed in the state was Washington First International Bank, Seattle, on June 11, 2010.
Cowlitz Bank's mission was to be the premier commercial bank holding company in the Northwestern United States. Through banking, mortgage, trust and other financial services along with offices stretching from the north in Puget Sound, through southwest Washington and into Portland, Oregon, Cowlitz specialized in providing financial services to independently owned businesses and individuals.
The bank prided itself on its community involvement. It was recently honored as one of Washington's 100 Best Companies To Work For. The prestigious statewide recognition came from employee polling in Spring, 2010, of companies of all sizes throughout Washington by Seattle Business Magazine. The bank was recognized for this achievement at the publication's annual Awards Ceremony held in Seattle last month.
The banks' management supported and encouraged its employees to serve in multiple charitable organizations and activities. As a result, employees spent their time and energy, both during and after business hours, improving the lives of the less fortunate. Cowlitz Bank employees spent one night every month providing dinner for approximately 100 people at Longview’s Community House. Employees volunteered for Meals On Wheels, sponsored a needy local family at Christmas time, distributed pre-paid phone cards to the homeless during the Christmas season, provided school supplies to needy students, and distributed food to low income families with children through Cowlitz County’s elementary schools. The bank also offered classes to those in need on alternative lending options and general banking and financial education. Those who completed the classes were able to open checking accounts even if they would not qualify under normal rules.
Colditz senior executive Lynda Larrabee is pictured here (center) receiving an Association of Washington Business (AWB) 2010 Community Service award from presenters Dr. Elson Floyd, president, Washington State University, and David Brukardt, AWB Board Chair.  Email this story to a friend
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