Kitsap Bank has assumed all nine branches of Westsound Bank's deposits and branch operations, including the Sequim branch at 1320 W. Washington St.
The agreement, announc-ed Saturday with the Federal Deposit Insurance Corporation, was triggered by Westsound's inadequate capital and liquidity, according to the Washington state Department of Financial Institutions.
The FDIC reached a purchase-and-assumption agreement with Kitsap Bank to protect all nonbrokered depositors.
"I want to assure (Westsound customers) that their deposits are safe, sound and readily accessible," said James Carmichael, Kitsap Bank's president and chief executive officer.
"They can feel confident that they are joining a tradition of safety and security from a financial partner who is dedicated to their fiscal well-being,"
Kitsap Bank will assume all FDIC-insured deposits - including accounts over the FDIC insurance limit of $250,000 - other than brokered, or Internet, deposits.
Shannon Childs, Kitsap Bank's senior vice-president, said that in similar purchases of failed banks, customers with accounts in excess of $250,000 were not insured beyond that amount and lost money.
"We are proud to say no depositors lost money with this transaction," Childs said.
"What this means is that Kitsap Bank took all of the deposits so that no one in our communities will be negatively impacted," said Carmichael. "Rest assured; none of Westsound's depositors are in jeopardy."
All nine former Westsound Bank branches opened Monday as Kitsap Bank branches with all customers having access to their accounts at branches and on the Internet.
Until systems can be converted to Kitsap Bank, 990 E. Washington St., former Westsound customers will continue to do business as usual at the Sequim branch.
Childs said Kitsap officials are meeting with employees from Westsound to see if the change is a good fit for them and if they want to continue to work at their branch.
"The bigger picture is that employment opportunities will open up through our whole system," she said. "People move branch to branch in our system now, so it could happen with this, too."
Childs said Kitsap Bank has expressed interest in purchasing the Sequim Westsound Bank's property for future use.
"It puts us in a good position since the building is new, large, and we can have two branches at opposite ends of the town," she said.
Kitsap Bank's assets, currently in excess of $820 million, will reach more than $1 billion with the purchase/assumption of Westsound Bank. Westsound's assets in deposits are worth $260 million.
Kitsap Bank has 90 days from purchasing the deposits to let the FDIC know if it intends to purchase Westsound in its entirety.
However, Kitsap Bank does not plan to buy Westsound Bank, the company - only its deposits, Childs said.
"This was an opportunity to expand our bank and area of coverage," she said.
Founded in 1908, Port Orchard-based Kitsap Bank serves the Puget Sound region with 250 employees in 24 locations throughout Western Washington.
"Kitsap Bank remains a safe haven during these times of uncertainty," Carmichael said, "and stands well-positioned to serve our community in our second century."
The Sequim Gazette is located at 147 W. Washington Street in Sequim.
Business hours are Monday through Friday from 8:30 a.m. to 5:00 p.m. Phone 360-683-3311, or toll free at 800-829-5810. FAX 360-683-6670.
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