Summit Bank, Burlington, Washington, was closed today by the Washington State Department of Financial Institutions, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Columbia State Bank, Tacoma, Washington, to assume all of the deposits of Summit Bank.
The three branches of Summit Bank will reopen on Monday as branches of Columbia State Bank. Depositors of Summit Bank will automatically become depositors of Columbia State 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 up to applicable limits. Customers of Summit Bank should continue to use their existing branch until they receive notice from Columbia State Bank that it has completed systems changes to allow other Columbia State Bank branches to process their accounts as well.
This evening and over the weekend, depositors of Summit 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.
As of March 31, 2011, Summit Bank had approximately $142.7 million in total assets and $131.6 million in total deposits. Columbia State Bank will pay the FDIC a premium of 0.75 percent to assume all of the deposits of Summit Bank. In addition to assuming all of the deposits of the failed bank, Columbia State Bank agreed to purchase essentially all of the assets.
The FDIC and Columbia State Bank entered into a loss-share transaction on $113.4 million of Summit Bank's assets. Columbia State 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 transaction also is expected to minimize disruptions for loan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html.
Customers with questions about today's transaction should call the FDIC toll-free at 1-800-894-3219. The phone number will be operational this evening until 9:00 p.m., Pacific Daylight Time (PDT); on Saturday from 9:00 a.m. to 6:00 p.m., PDT; on Sunday from noon to 6:00 p.m., PDT; and thereafter from 8:00 a.m. to 8:00 p.m., PDT. Interested parties also can visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/summit.html.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $15.7 million. Compared to other alternatives, Columbia State Bank's acquisition was the least costly resolution for the FDIC's DIF. Summit Bank is the 43rd FDIC-insured institution to fail in the nation this year, and the first in Washington. The last FDIC-insured institution closed in the state was Pierce Commercial Bank, Tacoma, on November 5, 2010.
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Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's banking system. The FDIC insures deposits at the nation's 7,657 banks and savings associations and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. The FDIC receives no federal tax dollars – insured financial institutions fund its operations.
FDIC press releases and other information are available on the Internet at www.fdic.gov, by subscription electronically (go to www.fdic.gov/about/subscriptions/index.html) and may also be obtained through the FDIC's Public Information Center (877-275-3342 or 703-562-2200). PR-90-2011