OLYMPIA – The Washington Department of Financial Institutions (DFI) closed City Bank today, citing inadequate capital and severe loan losses. Immediately following the closure, DFI named the Federal Deposit Insurance Corporation (FDIC) as receiver of City Bank.
The FDIC immediately entered into a purchase and assumption agreement with Whidbey Island Bank, headquartered in Oak Harbor, Wash. Whidbey Island Bank will assume all deposits and certain assets of City Bank, except certain brokered deposits, which will be paid out by the FDIC.
“City Bank’s capital has been depleted by large loan losses and resultant loan loss reserve provisions associated with its construction loan portfolio,” Brad Williamson, Director of DFI’s Division of Banks explained.
“These are exceptionally challenging economic times for those community banks focused on commercial real estate land acquisition and construction lending,” DFI Director Scott Jarvis said. “Any time DFI closes a bank it is a sad event. We are very pleased, however, to see this bank acquired by Whidbey Island Bank — another Washington State chartered bank with strong community ties and a 50-year history of serving the banking needs of Washington businesses and residents.”
City Bank, headquartered in Lynnwood, Wash. has branches located in Snohomish and King counties. All will be assumed by Whidbey Island Bank. All eight of City Bank’s drive-up locations will open tomorrow as Whidbey Island Bank branches for normal Saturday banking hours. All locations including the main office will reopen on Monday, April 19.
Throughout the weekend and transition, City 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 Dec. 31, 2009, City Bank had total assets of $1,129,154,000 and total deposits of $1,029,494,000.