FDIC closes University Place bank; first failure of ‘13

WASHINGTON — U.S. regulators on Friday closed a small lender in Washington state, making it the first bank failure of 2013 following 51 closures last year.

The Federal Deposit Insurance Corp. seized Westside Community Bank, based in University Place and Sunwest Bank, based in Irvine, Calif., agreed to assume all of the failed lender’s deposits and buy essentially all of its assets.

Westside Community Bank had $97.7 million in assets and $96.5 million in deposits as of Sept. 30. Its failure is expected to cost the deposit insurance fund $20.3 million.

U.S. bank closures have been declining since they peaked in 2010 in the wake of the financial crisis and the Great Recession.

In 2007, just three banks went under. That number jumped to 25 in 2008, after the meltdown, and ballooned to 140 in 2009.

In 2010, regulators seized 157 banks, the most in any year since the savings and loan crisis two decades ago. The FDIC has said 2010 likely was the high-water mark for bank failures from the recession. They declined to a total of 92 in 2011.

Last year’s bank failures trickled to 51, but that’s still more than normal.

In a strong economy, an average of only four or five banks close annually. The sharply reduced pace of closings shows sustained improvement.

From 2008 through 2011, bank failures cost the deposit insurance fund an estimated $88 billion, and the fund fell into the red in 2009. But with failures slowing, the fund’s balance turned positive in the second quarter of 2011. By Sept. 30, it stood at $25.2 billion, up from $22.7 billion at the end of June.

The FDIC expects bank failures from 2012 through 2016 to cost $10 billion.

More in Herald Business Journal

Health-care consumers need to take the lead, so get smart

David Russian, CEO of Western Washington Medical Group, writes our third essay about fixing health care.

More business, more competition for Everett kidney dialysis center

Nonprofit Puget Sound Kidney Centers sees large for-profit competitors enter state market.

Molina Medical holds fall carnival for families in Everett

Molina Medical is hosting a free event for families in the Everett… Continue reading

Leadership Snohomish County celebrates 20 years of service

Leadership Snohomish County is celebrating its 20th anniversary. The organization was launched… Continue reading

Snohomish, Monroe manufacturers honored for innovation, excellence

Two Snohomish County companies have been honored with Manufacturing Excellence awards at… Continue reading

Remodeled home tours planned this weekend

This weekend, Edmonds-based Chermak Construction will participate in the 2017 Remodeled Homes… Continue reading

Barron Heating to celebrate anniversary at Marysville showroom

Barron Heating and Air Conditioning is celebrating its 45th anniversary from 10… Continue reading

Robots on Wall Street: Slow-footed regulators lose ground

Watchdogs have to figure out how to check computers running lightening-fast algorithms.

US budget deficit hits $666B, an $80B spike for the year

The deficit issue has largely fallen in prominence in Washington in recent years.

Most Read