Friday, August 5, 2011

SO THAT HAPPENED: Bank of Whitman fails

Posted By on Fri, Aug 5, 2011 at 9:39 PM

At 9:45 pm Friday evening, the Bank of Whitman branch in downtown Spokane was still buzzing with activity, but no one was being allowed inside. Large groups of employees crammed into one office. Some of them appeared visibly shaken. Collapsible tables had been set up near the teller windows in the branch's large main room. There were dozens of document boxes on the tables and on the floor. Security guards perched on folding chairs in the vestibule, intercepting gawkers and offering to answer questions.

At around the close of business Friday, the FDIC announced that Bank of Whitman had failed. Richard Riccobono, director of the Department of Financial Institutions' Division of Banks told the Seattle Times, "Large loan losses made it impossible for Bank of Whitman to continue."In Mid-February Bank of Whitman was ordered by federal regulators to raise assets to cover those losses or merge with another bank. It is the first bank to fail in our region since the start of the financial crisis three years ago.

In the wake of the failure, Columbia State Bank of Tacoma has agreed to take over Bank of Whitman's deposits and liabilities.

Bank of Whitman was based in Colfax and had 20 branches. Eight of the 20 branches will reopen Monday morning, including the downtown Spokane location. 

An FDIC notice posted on the door said Bank of Whitman customers will still have access to their money through ATMs, debit carts and by writing checks. The notice made no mention of savings accounts.

Whitman is the third bank that has failed in Washington in 2011. According to the Seattle Times, the other two — Summit Bank in Skagit County and Snohomish County's First Heritage Bank — were assumed by Columbia State Bank as well. 

Below, cell phone photos of State Division of Banks and FDIC notices and memoranda posted at the location:

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Luke Baumgarten

Luke Baumgarten is commentary contributor and former culture editor of the Inlander. He is a creative strategist at Seven2 and co-founder of Terrain.