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Kitsap Bank absorbs Westsound
Kitsap Bank assumed control and operations of Westsound Bank over the weekend, opening nine locations as branches of Kitsap Bank, on Monday.
As of Monday morning, the bank formerly known as Westsound opened under the new name, in some cases necessitating improvised signs to announce the change.
As a result of the acquisition, Kitsap Bank becomes the largest bank on the Kitsap and Olympic peninsulas, with approximately $900 million in deposits.
This exceeds those of the previous leaders, Bank of America and Washington Mutual, by at least $150 million, according to Kitsap Bank president Jim Charmichael.
“This gives us a much larger market share and enhances our position in the community,” he said.
Kitsap Bank has always characterized itself as a “community bank” and stressed its local roots. Charmichael said this will not change, and he promised the increased size will not negatively affect customer service.
Rather, he expects current Kitsap Bank customers will see no change in service quality, while absorbed customers will see a marked improvement.
Some of the 90 Westsound employees are still working at their respective branches, but their salary is being paid by the FDIC during the transition. Charmichael said the transition will take 60 to 90 days, at which point decisions to close locations and reduce or increase the workforce will be made.
The only decision made so far is to maintain both the Westsound and Kitsap offices in Sequim, since they are on opposite ends of the town’s main thoroughfare.
In several other locations, offices of both banks are in proximity to each other, and one would most likely close.
Kitsap will also acquire Westsound’s downtown Bremerton headquarters and use it to expand its computer services, eliminating the need for an already-designed new construction project.
Charmichael heard of the FDIC’s intention to close Westsound about a month ago through its standard alerts, in which the FDIC notifies qualified purchasers about a bank’s availability.
After signing the required non-disclosure agreement, Kitsap learned that Westsound was up for grabs, and decided to submit a bid.
Kitsap Bank’s bid included the willingness to assume responsibility for around $250 million in Westsound deposits, while declining to assume an additional $49 million in construction loans.
Carmichael said assuming these loans was part of the initial requirements, but that Kitsap Bank was not interested in taking those over.
The $250 million, which originates from the FDIC fund assessed from bank fees, will be gradually deposited into Kitsap Bank, where it will be accessible to Westsound depositors.
Kitsap Bank is not paying the FDIC anything in this transaction, so it would be inaccurate to say that it “bought” Westsound. Carmichael said characterization of the transaction as a sale was the largest point of public misunderstanding, followed by uncertainty about the level of deposit protection.
“Kitsap Bank will assume all deposits of Westsound Bank regardless of the amount,” Kitsap Bank VP Shannon Childs said. “So even if deposits exceed the $250,000 insured limit, they are protected.”
Charmichael estimated there were 12,000 active Westsound accounts that will operate unhindered, using the same checks and ATM cards.
After the initial transition, account holders will be issued new cards and checks.
After a certain period of inactivity, some of the accounts may be forwarded to the state.
“This is a difficult time for our community, as we cope with the loss of a local financial institution,” Carmichael said. “But I want to assure everyone that Kitsap Bank’s and Westsound’s dedicated teams of banking professionals will work diligently to make this a smooth transition for our new customers. As we complete the conversion in a few months, our Westsound customers will enjoy enhanced banking services, with the added convenience of a larger network of locations."
Customers seeking immediate information can visit www.kitsapbank.com or www.fdic.gov for more details, or call Kitsap Bank’s Customer Service Center Monday through Friday, 8 a.m. to 5 p.m. at (360) 876-3644 or (800) 283-5537.
The FDIC toll-free information line for this bank closure is (800) 830-4735.