OLYMPIA – The Washington Department of Financial Institutions (DFI) closed Summit Bank in Burlington, Wash. today, 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, Wash. 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.
“Summit Bank has suffered significant losses associated with real estate lending. 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, headquartered in Burlington, Wash. has three locations which will reopen Monday as branches of Columbia Bank.
Throughout the weekend and transition, Summit 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, 2011, Summit Bank had total assets of $142,729,000 and total deposits of $131,631,000.