Serving Whitman County since 1877
The four former Bank of Whitman branch banks which provided the lone banking in their respective towns have now been placed up for bid by the Federal Deposit Insurance Corporation, according to Richard M. Riccobono, director of the division of banks for the state’s Department of Financial Institutions.
The FDIC has put the banks up for bid as part of its effort to recover assets as appointed receiver for the state department which officially shut down the 20-branch Bank of Whitman Aug. 5.
The four area bank branches now idle include Endicott, LaCrosse, Washtucna and Lind.
Riccobono said they are now waiting to see what bids, if any, are made to FDIC for the banks.
Riccobono also reported that Mattawa, a town which also lost its only bank in the Bank of Whitman shutdown, has been picked up by Columbia State Bank in another bid session conducted by the FDIC.
He said Columbia State Bank and Sterling Savings had bid on the Mattawa branch which is expected to open next month.
Riccobono noted the Mattawa branch had a larger scale of operation than the four area banks now up for bid.
“They have to have a certain level of deposits, and they have to generate a certain amount of loan activity,” he commented on whether or not the former branches can attract bidders and return banking service to the towns.
Columbia will add the Mattawa operation to the eight banks it took over under its bid with the FDIC to assume parts of the Bank of Whitman operation.
Residents of Mattawa, located along the Columbia River south of Vantage, have reported they have been banking in Royal City or Othello.
Riccobono explained the FDIC bid process is part of its work as receiver to recover assets.
He pointed out the first-in-line creditor is the FDIC which had to cover $134.8 million of the bad loans from the Bank of Whitman portfolio. The loss amounts to 25 percent of the assets.
Last in line for the proceeds would be the Bank of Whitman shareholders. As of right now, the sums recovered by the FDIC aren’t expected to reimburse shareholders, Riccobono explained.
He also pointed out the FDIC staffers assigned to the recovery operation are a separate division from the staff which covers normal day-to-day activities under the deposit insurance task of the organization.
Among the last assets to be recovered are expected to be the outcome of lawsuits, most of them collection actions, filed in area superior courts by the Bank of Whitman.
Colfax attorney Gary Libey, who formerly represented the bank, noted the suits have been filed in several area counties. Later suits filed with the courts involved collection actions on alleged sums due the bank.
Libey noted the pace of the filings increased when Bank of Whitman began to encounter tough times.
Large loan losses, particularly in real estate, were cited as reasons for the bank’s failure.
Many of the suits involve actions against Bank of Whitman customers who allegedly failed to repay promissory notes. Others involve sums alleged due on loans when the borrower’s collateral, put up to back the loan, turned out to be less than the stated value and the bank still was facing a loss.
Officially, the FDIC as receiver for the state, becomes the plaintiff in the Bank of Whitman collection suits which could go on for years.
Also in the legal process are suits against the Bank of Whitman which eventually could go against the FDIC efforts to offset losses by recovering assets.
Reader Comments(0)