The story continues in Seattle. Another local bank that has had troubles dealing with Special Assets related to their new construction loan departments has gone down again. This bank as many before it fails to recognize that they need to make changes with regard to how they are handling these distressed assets. Many properties are in the wrong hands of Reators who simply do not have the band width or knowledge of how to dispose of these properties. The bank managers are not willing to change, be transparent, or even discuss options. They just sit on their hands as the ship goes under. No surprise for many of us who watch this daily. Some banks are willing to take advantage of well trained and talented Realtors who know how to re position and sell bank owned multifamily properties. See the story below;
Washington First International Bank, Seattle, Washington, was closed today by the Washington Department of Financial Institutions, whichappointed the Federal Deposit Insurance Corporation (FDIC) as receiver.To protect the depositors, the FDIC entered into a purchase andassumption agreement with East West Bank, Pasadena, California, toassume all of the deposits of Washington First International Bank.
The four branches of Washington First International Bank will reopen during normal business hours beginning Saturday as branches of EastWest Bank. Depositors of Washington First International Bank willautomatically become depositors of East West Bank. Deposits willcontinue to be insured by the FDIC, so there is no need for customersto change their banking relationship to retain their deposit insurancecoverage. Customers of Washington First International Bank shouldcontinue to use their existing branch until they receive notice fromEast West Bank that it has completed systems changes to allow otherEast West Bank branches to process their accounts as well.
This evening and over the weekend, depositors of Washington First International Bank can access their money by writing checks or usingATM or debit cards. Checks drawn on the bank will continue to beprocessed. Loan customers should continue to make their payments asusual.
As of March 31, 2010, Washington First International Bank had approximately $520.9 million in total assets and $441.4 million intotal deposits. East West Bank will pay the FDIC a premium of 0.5percent to assume all of the deposits of Washington First InternationalBank. In addition to assuming all of the deposits of the failed bank,East West Bank agreed to purchase approximately $501.0 million of thefailed bank's assets. The FDIC will retain the remaining assets forlater disposition.
The FDIC and East West Bank entered into a loss-share transaction on $418.8 million of Washington First International Bank's assets. EastWest Bank will share in the losses on the asset pools covered under theloss-share agreement. The loss-share transaction is projected tomaximize returns on the assets covered by keeping them in the privatesector. The transaction also is expected to minimize disruptions forloan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html.